How To: Avoid Foreclosure

Since 1.1 million of you will soon be forced out of your homes due to the subprime mortgage debacle, we thought we’d link this extensive article in the Washington Post detailing the various strategies one can use to negotiate with lenders and hopefully stay in your home.

The big idea is that its a better deal for the bank if they can work something out with you, because with so many vacant homes on the market these days… foreclosing just isn’t what it used to be —MEGHANN MARCO.

Fighting to Keep the Roof
[Washington Post]
(Photo: Spidra Webster)

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  1. MercuryPDX says:

    Ahhh… the irony of ads placed around the article.

    $300,000 Mortgage for $965⁄mo! Refinance & Save $1,000’s!
    >>$425,000 Loan for ONLY $1,417⁄mo. – LendingTree®
    Refinance Rates As Low As 2.9% – FREE QUOTES!
    etc. etc.

  2. itsgene says:

    I don’t think I’d be giving my mortgage business to a finance company that can’t spell “residential.”

  3. katinka says:

    and can’t spell mortgage! mortage???

  4. ahwannabe says:

    How To: Avoid foreclosure. Just rent, for pete’s sake. Sheesh.

  5. AcilletaM says:

    How about this, next time that broker, saying he’s your buddy, has figured out a way for you, yes you, to afford that home you never even dreamed you could afford, walk away and realized your limitations. It’s a lot easier than having to ask your parents, siblings, friends, no-tell motel manager, etc. if you can move in for a little while.

  6. Alexander says:

    This stands out the most for me:

    “The refinancing never came through, leaving her stuck with a $3,650 monthly payment on her $40,000 salary. McKenzie fell behind on her payments. She’s in danger of losing her house this summer.”

    She initially got into a mortgage that was well above her entire MONTHLY earnings? I hope that is a typo, otherwise she got a $3650 mortgage when she was only making about $3300 and that is probably before taxes. Maybe I’m just being a dick, but it seems a lot of this foreclosures have to do with people getting houses they simply can’t afford. Hell, my wife and I make about $7700 a month combined and I’d think twice before getting into a mortgage that is almost half of our income.

  7. Two bad misspellings and you want these people handling financial and legal documents? Ha. If you can handle the basics, you certainly won’t be able to get my real business.

  8. rbb says:

    @alexander: The $3650 was after the the “teaser” rate ended. She was probably just making interest only payments before that. Then she could not re-fi and was on the hook for a $3650 payment.

    I have no sympathy for that lady. She should have asked herself what will my payment be if I am not able to refinance? Can I afford this? etc.

  9. AndyFromTucson says:

    Why on earth would anyone want to stay in a house that they can’t afford to make the payments on? What kind of masochism is that? Its like “10 tips for how to avoid coming in out of the rain.”

  10. joeblevins says:

    Please help me, I can’t afford the price of a new Viper. I need money.

    So much of this is victim worship. People have to be held accountable.

    If you can’t afford the house payment, then the ONLY option should be to move out. And you should move out as soon as you realize the payment will cause you trouble. Don’t wait until you are going under. Act right away.

    Why should idiots get preferential treatment when they default on thier loans? If I was to default, I would lose my house, why shouldn’t they? Just because they are stupid and make bad mistakes? Heck, that isn’t a virtue that should be rewarded.

    If you are smart enough to be checking out this website then I offer you this. Check what your mortgage payment will be this year and next. If you won’t be able to afford it, then go ahead and start to sell before the market gets flooded. Then either rent, or buy a house you can actually afford. And get a normal straight 30yr Mortgage. Don’t get any of the tricky ones, don’t go for 50yrs.

  11. Canadian Impostor says:

    Waaaa I didn’t read the fine print and they’re foreclosing. I should be able to afford a $500,000 house I deserve it!

  12. MeOhMy says:

    @rbb:

    I have no sympathy for that lady. She should have asked herself what will my payment be if I am not able to refinance? Can I afford this? etc.

    Worse: she could potentially short sell and cut her losses, but she won’t do it. Figure that one out. I wouldn’t be happy about dumping my house, but if it meant getting off of a $3000+ mortgage payment, I’d suck it up.

    I’m tempted to call my lenders and tell them that I want a hook-up. Maybe cut my interest rate my a percentage point or two or knock a few months’ worth of payments off my balance.

    I resisted the urge to buy a big fat house and become a headache for my lender – where’s MY prize?

  13. Keter says:

    I bought my house at the height of the subprime hoohah, and was met with stares of disbelief and even a few rude comments when I insisted that I only wanted to borrow a third of what I was “qualified” for. I had to change lenders twice when the papers I was given to sign contained balloons and other such traps. It was really difficult to finance the responsible way, and I’ll bet a lot of people just gave in because they didn’t have the time to deal with the used-car-sales tactics of the lenders.

  14. Type-E says:

    How To: Avoid Foreclosure?

    Do not buy a house.

  15. joeblevins says:

    I was offered an Interest Only loan. The lady even said that one of my neigherbors got one. Well, I know that neighbor, and now 4 years later, they are sucking wind.

    I got the most house I could do honestly. It was pretty hard for a couple years, but I have grown into my payments. Except for tax and HO insurance, my payment is steady for another 24 years or so. (Until I move out).