Foreclosures

There's a new twist on foreclosures - I've read articles written by "professionals" - real estate agents, mortgage officers, financial advisors, ... saying that it doesn't make sense to continue to pay your mortgage if your home is now worth at or less than you owe.

I'd say this is irresponsible and unethical and it just passes the costs on to the rest of the home-owners or home-buyers. Thankfully, the mortgage industry and their oversee-ers, Freddie Mac and Fannie Mae also see this as irresponsible.

The banks call this behavior "Mortgage Walkers" - those who walk away from their homes or "Jingle Mail" - sending your keys to your lender. They have enacted tough rules to penalize these actions.

Foreclosures and foreclosure events - being 120 or so days late on your mortgage payments will now prevent people from purchasing another home for in most cases 5-7 years. Then, once someone gets their credit back to a place where they can get a mortgage, the banks will require most people with a foreclosure or foreclosure event on their records to put at least 10% down to qualify for a mortgage.

There will always be circumstances where a foreclosure is inevitable or a string of bad luck puts people in dire straits financially. Banks realize this. For anyone finding themselves having to make a choice between feeding their family or making a house payment, talk with your lender right away! There are many options that your lender will discuss with you. If that doesn't help, there are legitimate mortgage assistance organizations out there to help as well. Just seek help and advice before you get in over your head.