Land of Confusion: I am behind on my mortgage, what options do I have?

Written by Posted On Thursday, 17 April 2014 10:37

Even in 2014 as the housing market continues it recovery, many homeowners are still struggling.  In almost every situation once they fall behind on their mortgage they receive multiple mailers and advertisements about potential help or solutions. But the problem for many homeowners is actually understanding who to trust and what course of action to take. To be honest most advice homeowners get initially is dead wrong. The reason is simple, in most cases when a homeowner is seeking help they reach out to an entity that is selling a program vs determining the potential needs of the client. The second issue is that there are very few people who have the resources to understand the multitude of programs and resources available. 

Lets look at who struggling homeowners reach out to and why they may run into problems. 

1. Friends & Family: Typically these are people you trust, but more than likely very uninformed or even biased as to what help is available. 

2. Attorney:  One thing I do know is that they will charge a fee or retainer. One thing I do not know is their knowledge in terms of "Loss Mitigation" with banks. The number one complaint I hear is that homeowners have spent thousands of dollars working with attorneys with zero results. It that to say that all attorneys are a waist of money? No, but really do your due diligence.

3. Real Estate Agents: ( I am an agent for disclosure purposes)  Most agents are in the business of selling property. Very few agents got into real estate to handle "Loss Mitigation" matters. In general most agents will talk to you about selling or short selling your property. It may not bee a bad option when all is said or done, but agents tend to be under educated when come to programs to save your home.

4. Non-Profit organizations:  In general these organizations are there to truly serve the community. They can help offer guidance on how to proceed. In some cases they will work with you and your lender to find a solution. But overall they tend to be very ineffective.   Bottom line, they do not have the resources on a personnel or financial level to adequately help a multitude of homeowners.

5. Your Lender:  This will be a whole new blog:  In essence some lenders are better than others with working with their borrowers.

Ok, so what do you do? 

Here is where I get to plug or  But my real answers is three fold.

1. First and foremost determine a goal and an initial plan of action.  You can get information from each of the resources above (including attorneys) to at least outline a possible solution. Do not wait until the last second hoping you are going to be able to live in your house for free for a period of time. Evaluate the information you have received. In my opinion it makes sense to give the most credibility to the source that offers a couple different solutions and a game plan.

2. Don't spend money upfront on any program.  In reality even if promised a money back guarantee, there are no refunds.  Credible institutions will who charge a fee will do so once an acceptable outcome is achieved. NO money upfront even to an attorney.  

3. You need to have proper expectations. You are in a financial hardship for a reason. An outcome that some other person may or may not have received has no bearing on your situation. In essence you have to "Play Your Own Ball "  (Golf Analogy).  Everybody's situation is different and do not cry about how you are a victim of the mean banking system. Banks and lenders at times are hard to work with, but complaining about they should have never given you a loan in the first place is ridiculous. Banks and lenders are required to help you find a solution, but it has to be beneficial to both sides. Finally once you have decided on a course of action? Make sure you understand the guidelines and procedures in accordance with the laws in your state. Be prepared and informed.  

At & we are here to help (California) . But at the end of  the day the more well educated you become the better chance you will have to achieve the solution you are hoping for.

Some other potentially gov't organizations

1. Consumer Finance Protection bureau 

2. Making Home Afforadable

3. Office of Comptroller of Currency (OCC regulates banking institutions) 

4. Keep Your Home California





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Brian McFedries

Ca BRE lic# 01738952

Broker lic # 01905908

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