Thursday, March 26, 2009

The Counselor's Corner

From one missed payment to a critical response intervention...

by Toby Smith

Consider the phases of missed mortgage payments:

Phase 1: Okay, we missed this month’s payment because of the cutbacks, but we can catch up by juggling a few things.

Phase 2: Well, I thought we could catch up, but I didn’t plan on the alternator going out. The car has to get repaired so we can continue to go to work.

Phase 3: Oh my goodness! We are 3 months behind and the phone calls are driving us crazy. Why don’t these mortgage lenders leave us alone!

Phase 4: We’re in serious trouble, but still won’t talk to “them” or open the mail.

Phase 5: An attorney’s office sent us papers today. Maybe we better open the mail and find someone to talk to – NOW!

Phase 6: I have called that counselor 16 times! Why won’t anybody return my call?

Phase 7: The counselor and lender had another long conversation today. We have to come up with the money by next Friday. That’s it.

Phase 8: I can’t believe this is happening. What are we going to do?!?

Does this sound familiar?

It’s amazing how often this scene gets played out in the offices of The Homeownership Resource Center. Equally fascinating though – and less known – is that the situation can still be turned around; even in Phase 8, when things get down to the wire. My colleague, “California cool” Mary Regan is the coordinator of the Critical Response Unit and she often mentions that 3 things must be in place to save a home from auction: a solid budget showing a surplus, stable employment and some cash.

Okay, more than just some cash. Lenders usually will accept either a negotiated amount of the arrearages or the full amount of all past due payments. In Phase 8, there is no room for equivocation; either the home gets saved from auction (and the negotiating continues if the full amount to reinstate the loan is not paid) or sadly, the sale occurs. Fortunately, for many clients, Mary is in place and her saves are becoming the stuff of legend.

We, however, strongly encourage any homeowner in trouble to come see us now…in Phase I…before one missed payment ends up requiring a critical response.

The worst thing you can do is to do nothing. Contact us today. In North and South Carolina, call 888-320-0350.

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