It's Take Charge Thursday, and all this week we continue our look at foreclosures, and what kind of help is out there for people who find themselves in this very difficult situation.
HUD certified counselors tell us things appear to be getting better for people who need for help, and it looks like that will continue.
Even though the counselors are handing more foreclosure cases than ever, they say some banks are starting to work with clients more to get through these tough situations.
But the first and most important step is to ask for help early in the process.
Experts say if you can ask for help as soon as you realize you can't afford their payments as they are now, it can make a huge difference.
“Not every situation is solvable, but we can certainly try the best to see what options are available or what they can change in their family situation to make other options become available,” said Laura McPhee, a HUD certified counselor with Greenpath in Elkhart.
For some, problems can be avoided just by some simple budget counseling
“Now is the time to go through what we call a crisis budget; what is the priority? Things you need to cover, and if there’s anything that could be cut out at this point now's the time to do it,” McPhee said.
But for many, the problem continues beyond a budget.
“Please come in and see us, we want to help. We really want to make this a lot less stressful for families facing such a dire time in their lives,” said Eddie Sauceda, a HUD certified counselor with La Casa in Goshen.
Greenpath and La Casa are just two of the local agencies that have HUD certified counselors on staff, who work for free.
By assessing your situation, they can take you through what options you have.
“We ask the client, what are your intentions for the home? If you want to keep it, we try to find a way to help them do so,” said Amy Kennedy, with La Casa.
As we told you in part 2 of this series, if you want to give the home up, short sale may be your best option. There are realtors who specialize in them in our area.
Meanwhile, if you want to try to save your home, there are many different options.
Some banks will agree to forbearance. That's where you may be allowed to delay your payments for a short period of time, with an understanding that you'll bring the account back to even later down the line, through a payment plan or by some other means.
Others might agree to a reinstatement; even though you're behind in your payments you can promise to pay off what you owe in a lump sum to have for them by a certain date.
But if you've had a job loss, those short-term options might not be realistic.
That's when you may need to look at modifying your mortgage.
There are many different ways to do that, but it may allow you to extend the length of your loan, or add your missed payments back into the loan, or find another way to bring your payment total down.
These options not only depend on your situation, but on who your lender is.
“I think we're seeing some (lenders) that are very proactive in terms of helping our customers than others that are not offering as many options. That can be frustrating for the borrower, seeing their neighbor get some help, and they haven't been able to. But it's changing almost on a monthly basis in terms of new options that are becoming available,” McPhee said.
Counselors say some banks are becoming more cooperative in pursuing some of these options, and there could be bigger changes soon.
“Especially now with the new plan by President Obama we're looking at (working with) the people that are not delinquent and trying to do something about that,” Sauceda said.
Among other things, the President's "Making Home Affordable" plan, outlined last week, would give lenders incentives to modify people's loans; hopefully to avoid foreclosure.
The counselors are keeping their eyes on the plan's website, www.financialstability.gov, where they hope to see a list or participating banks soon.
“I just keep telling people just keep checking their website, keep watching the news you never know what's going to come up next,” McPhee said.
Again, those HUD certified counselors work for free, and they say you should never pay anyone for this kind of help, and should keep an eye out for foreclosure rescue scams.
We have a list of the counselors in our area with their contact information and also a link to the "Making Home Affordable" plan's website, just look below.