Are You Behind on Your Mortgage?

Record 1 in 10 Mortgages Are in Trouble

The housing market has been in turmoil for the past couple of years in some parts of the country. Now it has become widespread with 1 in 10 mortgages being in trouble. While foreclosure statistics range from 1 in 200 to 1 in 3 in some parts of the country, what is more concerning is that the record 1 in 10 mortgages in trouble are loans that aren't even factored into foreclosure statistics. When you consider that over 50% of Americans have more going out each month than they have coming in, you can see where the bottleneck could be quickly approaching.

In the past, home equity loans were free flowing and weren't based on as much as the income, as they were on the amount of equity in the homes that were at inflated values, by today's standards. Quickly, that equity started disappearing as Americans borrowed as much as they could with some companies offering mortgages as high as 125% of the appraised value. There is no reason to go into the miserable equity positions these mortgage holders will be in, if they have to foreclose.

The problem with foreclosures is that they hurt everybody. The neighbors will lose value immediately when the foreclosed home sells at less than the market value because it is factored into the comp sales that figure into their property appraisals. The person who is foreclosed on may find they are homeless and unable to rent a house because their credit is ruined for the next several years. A bankruptcy ruins your credit for up to ten years and the new laws make it not as forgiving as it once was.

Many of the people that are factored into the 1 in 10 record mortgage problems are actually working jobs and haven't experienced a cut in income, it's just that they were living beyond their means to begin with because of personal loans and unsecured credit card debt that has higher interest rates now than it did before the recent recession.

There are advantages to staying in your home, including keeping your credit intact, keeping a roof over your families head and holding on to the family dream home you wanted when you purchased it. Just because home values have dropped due to foreclosures does not mean that the increased value won't be there in a few years. Much like the stock market, many people bailed when the market was at the bottom, which is when you should have purchased. The smart investors held on and have seen their stocks regain the value in a relatively short time.

Not that homeowners will see such a quick regain of value, but if they can hold on and not become one of the statistics, they will realize the profit they hoped for in a few years. Talking to a loan modification specialist is one way to work with the lender to avoid foreclosure, lower your monthly payments through reduced principle balances, and lower interest rates so your monthly payments are more affordable.

You don't have to become a statistic and you don't have to be part of the 1 in 10 people that are in trouble with their mortgage, but not foreclosed on yet. A loan modification specialist can keep you from becoming a statistic.