Help Is Now Available Even For Those Not Facing Foreclosure

Posted on March 20, 2009
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Help is now available even for those who have bravely carried on with their mortgage repayments and are not facing foreclosure. But with the recession continuing one is always fearful of the foreclosure wolf knocking on the door.

Till now borrowers living precariously on their limited income like Kevin and Jennifer Norris could not renegotiate their mortgage terms until they defaulted on their payments. At this stage no bank would entertain their suggestions. The Norris’s have a near perfect credit score and are very reluctant to destroy that.

Recently 33-year-old Norris lost his job with American Express and now their sole breadwinner is his wife who works as a market researcher. They have a one bed roomed condo in Rye that they are planning to sell. Two years ago they had purchased it for $412,000 when the real estate was booming, without making any down payment. But right now the value of the house is less than the loan amount dues on the sub-prime mortgages. One is an interest-only loan for 10 year on 80% of the original price of sale. The second one is a fixed interest loan for 30 years on the balance amount. Thus the Norris couple has gone underwater.

Westchester County has started giving counsel to two groups of homeowners to manage the mauling of increasing unemployment together with plummeting house prices. There are those who are already defaulting and those like the Norris couple continuing bravely.

Sine 2005 the foreclosure rates have gone up by 104% and the default numbers shot up by 244% according to figures released to the press by County Executive Andrew J. Spano. According to RealtyTrac in February 2009 there were 2,250 houses already in foreclosure and 389 had been repossessed by the banks.

This is the first time that foreclosure prevention measures are taking into consideration the problems of those who have been update but without renegotiating loans cannot continue to be current.

In the forthcoming weeks the government will start using $50 billion – the sum allotted by the Congress to tempt the banks to reduce the monthly payment amounts for those nearing foreclosure as distinct from those who are already started to default To be entitled to such a help the debt must not be more than 31% of the income of the borrower. The County will be providing free legal help as well as counseling.

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