Your lender does NOT want your home
Sunday, May 6th, 2007A very common misunderstanding when I speak to clients facing foreclosure is that they believe that their lender is trying to “take their home from them”.
As pointed out in this article in the Buffalo News, this couldn’t be further from the truth:
Banks and other lenders insist they don’t want to be landlords and homeowners, and that they foreclose only as a last resort. Contrary to popular belief, they say, lenders routinely lose money on foreclosures. That factors in not only the legal fees that often run about $3,500, but also the cost of maintaining, marketing and selling the home later, they say, and the likelihood they won’t recoup the loan amount.
“We’re not in the business of trying to take properties and reselling them,� said Douglas J. Grobe, assistant vice president of mortgage default at First Niagara. “Any time we go to foreclosure, we take the risk that we can’t sell it.�
According to mortgage financier Freddie Mac, the typical foreclosure cost is nearly $60,000. And officials at HSBC North America, parent of HSBC Bank USA, HSBC Mortgage Corp. and HSBC Finance Corp., say their average loss on sale at foreclosure is 20 percent to 25 percent of the loan’s value.
So what are your options if you need to stop foreclosure on your home? Remember that often times, contacting your lender’s Loss Mitigation department is a great start. However, if you don’t have experience dealing with your lender, and working with banks and negotiating a repayment, it can often be difficult:
However, the programs have detractors. Some consumers and consumer advocates say they’ve had very mixed experiences with loss mitigation programs. They recite tales of frustration in calling an 800 number and trying unsuccessfully to reach a live person who can help them consistently. They say the paperwork is confusing, so consumers fill it out wrong.
“I can’t think of a single client who was able to benefit from the loss mitigation department when they contacted the bank by themselves,� said Carol Brent, staff attorney at Legal Services for the Elderly, Disabled or Disadvantaged of Western New York, which is teaming up with Legal Aid Bureau to start a foreclosure prevention program for low-income consumers. “It’s very frustrating.�
At www.SaveMeFromForeclosure.com we work with our clients together, helping them renegotiate a payment plan that they can manage. While you can take on this task yourself, sometimes it’s better to work with a company that has had experience negotiating many plans with many different lenders. You don’t have to tackle this all on your own. If you’re interested in how www.SaveMeFromForeclosure.com you can visit the website, or call 1-888-472-8380
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