We’ve all been following the headlines regarding Strategic Walk-Aways…basically a voluntary foreclosure.
For us, this that week has brought unexpected increases in homeowners that are facing ultimate foreclosure or giving up their home and doing a short sale.
Here’s what we have experienced:
3 completely separate scenarios in 3 different areas of Southern California. But the common thread is that each of the homeowners have 800+ credit scores and have never missed a mortgage payment.
- Family #1 Has two incomes, but both incomes are threatened. Mrs. is certain to lose her income very soon and Mr. has been put on notice he will be receiving a 10 days notice…just not sure what day. Bank won’t consider a loan modification because they are not behind on payments.
- Family #2 Never been late on a payment, on anything his entire life. Near retirement age and was let go from a long time career. Bank won’t consider a loan mod because he is on unemployment. He does have considerable savings in retirement but hates to blow through those and then have to foreclose eventually
- Family #3 Income has suffered, but still able to make the payments and have never missed a payment. Homeowner requested a loan mod but was told no, your not late. So, the homeowner missed a payment and the bank started talking to him. But what the bank said was this: Ok, we will modify your loan, but due to your arrear-age and the amount we can lower your payment we are adding a balloon payment to cover all that interest. Basically the savings of $200 monthly was going to cost nearly $300,000 over the life of the loan.
Kris and I work with people everyday in different hardship situations, some that just want to sell because they don’t want to keep paying for a property that is a basic “sinking ship”.
It’s so extremely obvious of the anguish these people are feeling. It shows in their faces, they talk of…where did I go wrong…I’ve always paid my obligations…I feel like a failure…
We want to share our views on this, to anyone that reads our blog:
Please don’t feel you have done something to cause this… you have done nothing wrong. The state of the economy is not your fault. Your among the few that have never put a “want” before a “need” and always fulfilled your obligations.
Don’t let anyone tell you that you have an obligation to drain your savings to “make your obligations”
Yes, the bank did tell one of our clients that….! They told the homeowner to call back when they have no more savings and then they would see about a loan modification.
Your not alone, and it will get worse before it gets better. Your credit will repair, and you will survive. The most important thing to consider is you families well being and future.
Kim
