Mortgage Problems
Homebuyers in new developments have been especially hard hit by the current housing crisis, and the worst is yet to come. New subdivisions are unique because all homebuyers who purchased their homes within a year or two of each other have mortgages at inflated prices and often with risky terms.
Do you have an adjustable interest rate?
In some areas, two-thirds of the mortgages made by big builders have adjustable interest rates. Some homebuyers’ interest rates and payments have already skyrocketed, while others will change in the next few years. These homebuyers will not be able to refinance before their payment goes up because they owe more than their house is worth.
Do you have a second mortgage with a high interest rate?
In parts of the country, half of the mortgages made by big builders also had a second mortgage. This leads to problems because homebuyers then have no equity and also because the majority of second mortgages made by these builders carried high interest rates.
Even many homebuyers with prime first mortgages received second mortgages with subprime rates. The builder’s mortgage company assured buyers they could refinance the two mortgages into one lower rate loan.
Is your subdivision a ticking time bomb?
All of these issues could be serious by themselves, but together they can make a dangerous combination. How much worse will things get before they get better?
(Link to Ticking Time Bomb Report?)
For more information, contact us.
If you are behind on your mortgage and facing foreclosure, you may feel desperate. The threat of losing your home is a very traumatic experience.
One of the most important things you can do is talk to the mortgage company. Contact the Loss Mitigation Department to discuss your situation and possible solutions.
Housing Counselors
HUD sponsors non-profit housing counseling agencies that can provide free or low-cost advice on buying or refinancing a home, preventing foreclosure, or dealing with credit issues. To find a counseling agency near you, call HUD at (800) 569-4287 or locate a housing counselor online.
Information For Arizona Homebuyers
Attorney General’s Office
The Arizona Consumer Fraud Act makes it illegal for any person or company to use deceptive or fraudulent practices in their business. If you feel that you were lied to or mislead when you purchased your home or received your mortgage, you can file a complaint with the Attorney General’s office. You can file a complaint online at or call (602) 542-5763.
State Licensing Agencies
In addition to submitting a complaint to the Attorney General’s office, you can also file a complaint with the state agency that is supposed to supervise and regulate the business that you have the complaint about. You should contact:
If the problem is about your home mortgage, contact The Arizona Department of Financial Institutions. You can call them at (602) 255-4421 or file a complaint online.
If the problem is with the company that sold you the house, contact The Arizona Department of Real Estate. You can call them at (602) 771-7730 or go online.
Lawyers
The Maricopa County Bar Association has a lawyer referral service to match people with attorneys experienced in the field of law that you are looking for. You can contact them at (602) 257-4434 or online.
Alternatives to Foreclosure
The following are some of the possible alternatives to foreclosure. The best choice for you depends on your situation.
With a REPAYMENT PLAN, you agree to catch up on the back amount by paying an additional amount of money every month on top of your regular payment.
In a FORBEARANCE AGREEMENT, the lender agrees to hold off on legal action and you agree to catch up by a certain date. Sometimes the payments can be reduced or suspended during the period.
In a LOAN MODIFICATION, the mortgage company lowers the interest rate or the amount of your loan to make it affordable.
If you have an FHA or conventional loan with mortgage insurance, you may be able to get a PARTIAL CLAIM from the insurance company to bring your loan current or help with future payments.
Filing a CHAPTER 13 BANKRUPTCY before the Foreclosure Sale may allow you to set up a repayment plan, which can be helpful if the mortgage company has been refusing to accept partial payments.
If you have a lot of equity in your home, you may be able to REFINANCE, although you will probably have to pay a high interest rate.
If you are over 62 and have a lot of equity in your home, you may be eligible for a REVERSE MORTGAGE, which will pay off your loan and allow you to stay in the house without having to make any future monthly payments.
If you have determined that you cannot keep your home, you can still SELL THE HOUSE and at least walk away with any remaining equity. If your house is worth less than the amount you owe on your loan, the mortgage company may agree to a SHORT SALE.
If you don’t have any equity in the home and just want to give the house back and avoid having it foreclosed, this is called a DEED-IN-LIEU (of foreclosure).