To Foreclose? Or Not To Foreclose? By Carl Hampton At Isnare.com Ezine Articles

It is very unfortunate that about half of Southern Californian home owners are having issues paying their mortgages. Some homeowners are having to adjust to a spike in the adjustable-rate and they cannot handle it. For many that's a 20 percent to 30 percent increase in their home loan repayments! Insane, isn't it, how many of us could really manage an increase of that size without any financial problems? The real problem here is now the loans were sold, most if not all loan offices fail to tell you what will happen when the “fixed rate period” comes to an end all they really care about is their commission on your loan.

In Los Angeles County alone the rise in foreclosures went up 5% and thats been the third spike in the past three months. In Orange County, the rate rose to 9%, in Riverside it rose a very dramatic 52%. The scary thing is that these foreclosure rates are predicted by many to rise even more.

Once your lender starts the foreclosure process it becomes public information. Any company can then approach the homeowners. How do you know what companies to use. This is a very stressful time so here are some tips that will help you. Don't pay any kind of initial fee, if a company asks for a fee upfront that's illegal. Before signing anything or handing over any money please check with the Better Business Bureau (visit http://www.labbb.org) to see if there are any complaints against that company. You should never have to pay a company for steps that you can take yourself, like postponing or suspending payments.

It's not all doom and gloom there are ways that will enable you to avoid foreclosure and keep that roof over your head. If you are taking some time off like a leave of absence, unpaid vacation or you lost your job then contact your lender and negotiate a lower payment. Explain to them what the situation is and see if you can be granted extra time to pay. Better yet ask for a temporary suspension of payment, a payment reduction, or a repayment plan. The important thing here is that you contact your lender as soon as possible. If you wait to long they are less likely to negotiate. Instead of foreclosing ask if your lender can extend the loan and lower the payments. Don't jump from the frying pan into the fire by taking out a second mortgage you can't afford, all that will do is delay the final outcome and put you deeper in debt. For those of you with bad credit be prepared for high interest rates. Seek credit counseling there are a few free resources. The federal housing department can be reached at (800) 569-4287 and they can recommend some good agencies. There is a really good nonprofit organization that will make recommendations that could help you called Homeonwnership Preservation Foundation. They can be reached at (888) 995-HOPE. There is another nonprofit called ByDesign Financial Solutions and they can be reached at (800) 750-2227. When calling either one of these, you should mention a default notice.

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