Heading Towards Foreclosure? There May Be A Way Out

Three months is all it takes to lose your home. Foreclosure has become a household word in Michigan over the past 12 months. Just about everyone knows someone or has a neighbor dealing with a foreclosure.

For most of the past year, Michigan has ranked among the three states with the highest percentage of late mortgage payments and foreclosures. In the fourth quarter, it came in third, behind Ohio and Indiana, with 2.39 percent of its loans in foreclosure.

While lax lending policies have been blamed for the unfolding home-mortgage crisis across the country, the distress in the Midwest has been exacerbated by fundamental problems with the economy. The region has been devastated by a severe drop in manufacturing jobs as the U.S. automobile industry shrinks.

Unfortunately, people who are behind on payments are too embarrassed to tell anyone in time to take corrective action. If you or someone you know is struggling to make payments, there are measures that can be taken to save a foreclosure from your credit report and sometimes more importantly your self-esteem. Due to the massive amount of foreclosures, banks are looking to cut losses as early as possible. They may be willing to take less than is owed if it means avoiding the costly fees of foreclosure. This concept called a “short sale” is handled in the Loss Mitigation department of the bank. They are trained to help find a mutually beneficial solution. Once you hit foreclosure, three months of missed payments, it’s too late, the bank no longer wants to help- they just want their money.

At the first sign of a missed payment, call your lender and strike a deal. Then find an agent who will help market your property to sell in the least amount of time. -Andrea Stanaway. Andrea is a Buyer Specialist with the Buckley Jolley Real Estate Team. She can be reached at 810-229-7000 or at andrea@buckleyjolley.com

Note: On April 16th, The Livingston Press & Argus published an article titled "Congress turns attention to rising tide of foreclosures". It lists the Proposals now before Congress regarding Foreclosures:

• Impose a six-month moratorium on foreclosures.
• Increase federal support for local foreclosure prevention programs.
• Strengthen the Federal Housing Authority and give it a "rescue fund" that would allow it to buy failed mortgages and restore credit on the loans.
• Increase penalties on banks that violate federal lending laws.
• Extend federal regualtions to mortgage brokers and other loan officers who are now only regulated by state laws.
• Create a federal anti-predatory lending law.
• Establish a federal standard to for a borrower's ability to pay.

Source: Gannett News Service research