Recession Time?

The economy is rocky. We are clearly heading into a recession. I get more and more files coming across my desk from clients in trouble with their mortgages. Many do not know their options or understand the process.

I thought it would be beneficial to share some insight into this process and alay some fears and misunderstandings. First of all, recognize that banks are businesses and make business decisions everyday. They also do not want to be in the real estate business. In a time when many lenders are cash poor and suffering from bad decision-making, you would be suprised what your lender is willing to do to help you pay them or sell your property. I have clients who've had to sell their properties for less than they owe and we've been able to negotiate with the lender to not only agree not to pursue them personally for the shortage, but to even report the loan as paid in full to the credit bureaus. We have also been successful, through some consulting relationships, to help clients clean up their credit reports after they have gotten past these problems to more easily move on with their lives.

So if you feel that your back is against the wall and you don't have any options, think again, calm down and call us. You'd be surprised at how we can help.

If you are going to negotiate on your own, remember that communication is the key. And so is persistance. Contact the lender every week or so to check in and give them an update, even if they've told you that it will be weeks before they are able to review your file. Most lenders have loss mitigation departments which offer hardship packages that they can send you to state your case and put together the proper financial information to help them make a decision and be flexible to work with you. Remember that the lender is trying to determine whether you are really in trouble or just trying to take advantage of the situation. For smaller lenders, it might take them 6 weeks or more to get back to you. Always follow up on faxes and emails to be sure they were received and have been logged in their system. It is my experience that somehow the lender seems to lose your materials a few times before things get started and you are in the system. Be persistant and don't get frustrated. Expect set backs and keep trying.

Good luck and I hope you fair well during these difficult economic times.