Dan Smith, a thirty-three year old electrician, bought a house for his wife and six-month old baby. For the first two months, Dan was able to pay the mortgage payment. Unfortunately, in the third month, Dan suddenly was faced with a mortgage bill that was considerably higher than what was originally set and also, definitely beyond his financial method. In an effort to save his family’s home, Dan applied for loans to momentarily stave off mortgage foreclosure. In the end; his efforts where futile, Dan lost his home; furthermore, he is thorough in debt. For Dan’s account of his experience, search for his story on YouTube or FightingForOurHomes.com, a website dedicated on putting a confront on the recent housing crisis.
What Dan experienced is a reality more and more American families are facing. However, these people are often in the dark as to why it has come to the point wherein they are confronted with mortgage foreclosure. The recent government action, though controversial as viewed by some, may have prevented the US economy from its continuous free-fall and produced a more vigilant air against questionable practices of financial institutions. Nonetheless, the fact remains that the families who underwent or undergoing mortgage foreclosures have many questions that were left unanswered.
Pinpointing the specific cause of the problem is a complicated matter. Some of the question asked by many may already not be answered completely, but it does not change the actuality that bad loans were given to people who have poor credit ratings. The initial confidence of these financial institutions to give out these kinds of loans is based on a haphazard assumption that the value of investments in realty will continually increase. Of course, with the recent turn of events proved these institutions wrong. Although, this realty crisis plaguing the United States may not disappear sooner, there are things families can do to at the minimum save their house from mortgage foreclosure.
The best thing people can do in these hard times is to re-asses how they use their money. Priorities should be set, and things that can be sacrificed in order to save money must be given up. Hence, if having a house is prioritized; then, a major portion of one’s income should be used for mortgage payments, especially delinquencies. Another option homeowners can use to prevent mortgage foreclosures is to re-negotiate the mortgage terms with the lender. From a lender’s perspective, a mortgage foreclosure is an expensive and time consuming course of action and consequently is preferred to be avoided by most lenders. Local government agencies may also offer payment assistance.