The foreclosure crisis has ensnared even the most prepared amongst us. Many homeowners who played by the rules are facing foreclosure after being hit with a declining economy, frozen credit markets and eventually empty promises of a mortgage industry which has failed to deliver on the promises it made when accepting taxpayer handouts. Many debtors who believed that they would eventually be able to get permanent mortgage modifications spent months and in some cases years digging themselves deeper into a financial hole by using their savings to make partial payments in the hopes that they could eventually qualify for a permanent mortgage modification.
Tips that might save you from being strung along by empty promises:
- If you don’t have a job or some type of income, you are most likely NOT going to qualify for a permanent mortgage modification. The bank won’t give modifications to individuals who cannot prove they are able to pay the mortgage under new terms.
- If you are holding onto the hopes that you will find a job and eventually qualify for a mortgage modification, it might be wiser to actually consider bankruptcy after remaining unemployed for a prolonged period of time. Currently, it is taking the average unemployed homeowner at least six months to find work. Have you been waiting longer than six months to find a job? If so, you might want to consider filing bankruptcy. Remember, you can still pursue a mortgage modification while in bankruptcy.
- Do not exhaust your life savings attempting to pay your delinquent mortgage. Every homeowner needs to decide how much of their assets they will use when attempting to save their home. The rule of thumb is that you need at least 3 months of expenses in an emergency savings account, but in an economy which is slow to improve many experts suggest at least six months of expenses be set aside.