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Putting a stop to foreclosures in California
By Melissa Wirkus
The slowing housing market
and rising mortgage rates, among a
variety of other factors, are causing
foreclosure rates to sky-rocket throughout
many parts of the United States.
California is especially prone to
the increase in foreclosure because
of a few reasons. First, many people
took out “exotic” mortgages
or sub-prime loans that are at a greater
risk of foreclosure because the payments
increase over time. Second, home values
rose exponentially during the housing
boom, and are now going down, so people
could end up owing more than their
house is now worth.
Now, people are left to pick up the
pieces and are scrambling to get help
to save their home from being foreclosed
upon. The problem is that pending
foreclosures are public record so
struggling homeowners
could find themselves consumed with
unsolicited offers for help where
it is difficult to tell a scammer
from a legitimate business.
An October 8, 2006 article by Gayle
Pollard-Terry of The Los Angeles Times,
“Foreclosure can be foiled,”
looks into things homeowners can do
to stop a foreclosure in its tracks.
“In Los Angeles County, foreclosure
activity — homes entering some
stage of the process — rose
5% from July to August, to 2,107 properties.
It was the third hike in three months,
according to RealtyTrac. In Orange
County, the rate rose 9%, to 606 properties,
in the same period, while Riverside
and San Bernardino counties posted
a steep 52% increase, to 2,717 properties.
These numbers are expected to rise,
he added.”
With this increase in foreclosures,
it means that more and more people
are going to need help to get themselves
out of the home owning mess they are
now in. This means that more and more
“companies” will open
and try to help these struggling borrowers,
especially in Southern California.
“Before signing anything, he
recommended checking with the Better
Business Bureau for any complaints
against the company and rejecting
companies that want to charge for
steps homeowners can take themselves,
such as negotiating with the lender
to reduce, postpone or suspend payments,
stop late fees or allow enough time
for the house to be sold.”
Your best bet when dealing with a
foreclosure is to act early. Banks
do not want to take away your house
– they would rather have your
money.
This is extremely beneficial to the
homeowner, since most cases of early
foreclosure can be fixed.
“‘For the person who is
still in that first early stage, one
to three months behind, the lender
is usually more receptive to the possibility
of a workout plan,’ said Pittman,
of ByDesign Financial Solutions, whose
services are free. Counselors negotiate
with the lender's loss-mitigation
department while prodding homeowners
to slash expenses and raise cash by
renting out rooms, holding garage
sales, refinancing car loans to lower
the payments, borrowing against a
401(k) or liquidating other assets.”
You actually have a variety of options
when dealing with a foreclosure, such
as refinancing
or sale. Act quickly and acknowledge
the problem and it should be fixable!