To learn to successfully manage your home mortgage, in or out of foreclosure, you must first put aside your emotional feelings about the home. Then, you make the decisions about your home the same way the bank does. Either the home is a good financial decision, or it isn’t. However, it might be possible to catch up on the home mortgage. For instance, you can work on financing it at a lower interest rate if the home meets your needs.
Manage Home Mortgages In or Out of Foreclosure
The problems begin when some homes become predatory and have predatory lenders. If the home is not worth the expense then perhaps it needs to go back into foreclosure. However, you can manage this process so that it takes longer than normal. That’s how a good foreclosure defense allows you to take time to save up for and find another home. The same foreclosure defense can also be done so you are not left with a tax debt or mortgage deficiency to repay.
The process of sitting down and deciding whether to rent or buy is just part of the process of setting up a budget. However, clients often file for bankruptcy without planning. In so doing, they might forget to strip mortgage liens, as an example.
You see, the second mortgage lien will not automatically disappear when you file bankruptcy. The fact is, motions to strip must be filed to remove judicial liens and second mortgages. Then, additional work has to be done to provide the court with appraisals. As you can see, filing for bankruptcy or owning a home isn’t like ordering a pizza. Instead, the homeowner must extend some personal involvement to make sure it goes right.
Renting or Buying? Sometimes Renting is a Better Option
Some people are never meant to be homeowners because they don’t keep up the property, pay property taxes, or insurance. If this sounds like you, you might want to rent a property and not own your own home. 50% of my clients just want the bankruptcy filed. Then, I normally see these clients every eight years as they file over and over.
However, the other half read the Bankruptcy Manual, take the Dave Ramsey courses, and actively interact with their bankruptcy because they thirst for a better life.
Choosing the Right Lenders Makes a Big Difference
Managing a home mortgage successfully, in or out of foreclosure, always starts with a good lender. But, be careful not to pay more for the home than what it can sell for. If you are paying more than it is worth, then you most likely do not want to buy it. However, it is often the mortgage lender is the one who makes the home a blessing or a curse. Additionally, if you have Ocwen Financial Corporation servicing the home mortgage, your home is probably a curse instead of a blessing.
The next thing to understand is it is the lender owns the mortgage, but it is the servicer who makes the phone calls when it is delinquent. You must be aware that servicers are paid for every phone call, letter, and mortgage modification they process. They also earn a commission from every late fee they collect. So, they actually make more profit keeping you delinquent than from helping you become up to date. Falling into this trap and having a predatory lender or servicer is a formula for foreclosure and often ends up being the reason for letting it go back.
Although the servicer might advise you what to do when you are in foreclosure, they also tend to advise you to do what makes them the most profit. Rarely is this what is best for you. Normally a loan serviced by Kentucky Housing Corporation or FHA is far better managed than a conventional loan that might be sold several times while your records and payments are lost. If you fail to properly find a good lender and mortgage banker before you buy, you often end up with one of these lenders later.
Managing Your Home Mortgage
Managing your home mortgage means making the payments on time at the right price and interest rate with the right lender. However, you might have to refinance to get a proper lender.
Failing to pay on time and going into foreclosure will add thousands to the cost of the mortgage which you might otherwise apply to your retirement. Therefore, the sooner you sit down with an attorney and properly plan what to do with a bad mortgage – the sooner you recover financially.
Responsible home management is similar to being a responsible husband, mother, employee, or businessman. It requires you to pay attention to the details of what’s happening. Again, it is not like ordering a pizza. Instead, you are part of the process, and it can’t be done without planning. If you allow the mortgage company to do it for you then, you get results that cost you dearly.
Bankruptcy often allows you to strip and remove the second mortgage, to apply for a mortgage modification, or to catch up on a mortgage and save a home. Contact my office right away to start the conversation. Nick C. Thompson, Attorney: 502-625-0905
Resources for Foreclosures
Where to Report Foreclosure Scams
Federal Trade Commission (FTC) for foreclosure scams.
Trustee Regions and Offices for foreclosure scams that involve bankruptcy
Other Related Information
How to Rent or Buy after Bankruptcy
Hardship Discharge Student Loans
Foreclosure | When and How to Walk Away
If you need help managing your loan see us about your defenses. I handled many of these cases for over 30 years. Call me to get the conversation started now. Nick C. Thompson, Attorney: 502-625-0905
