You Foreclosed Your House And You Think You\’re Off The Hook- Think Again

I would have trouble believing that people who have taken out mortgages become best friends with their mortgage lenders. Mortgage lenders raise rates as they please, and then, when they don\’t receive that payment, they will take away your place of residence. Today, this is an alarming trend that ends up with homeowners either underwater or renting an apartment. And now, banks are attempting to get their money back from the foreclosure sale.

As today\’s economy continues to suffer, it is all too often that a house goes into foreclosure and the amount due on the mortgage is more than the amount that the house was sold for. This remaining balance is called deficiency and it leaves mortgage lenders at a loss for words.

And even though the fact that you can agree with the mortgage lender or bank to sell the house for less, these institutions may still want to be paid what is owed. Certain factors might increase one\’s risk for this unfortunate situation including credit history, other assets owned, and liens such as second mortgages.

This issue is very important to the new group of homeowners who are making the choice to walk out on their houses despite their ability to afford payments. This is known as the \”strategic foreclosure.\” The belief of the people that do this is that it is better to pay rent at $1,000 than $3,000 on a mortgage every month.

Obviously, the mortgage lenders look at these strategic foreclosures with disgust. And it is no surprise that they are boosting their attempts to retrieve the money that is owed on such houses. The main targets? Homeowners who are just slightly behind on home payments.

Banks and mortgage lenders do not need to take action immediately after the house is foreclosed and sold. It is in their best interest to go after the money years after the fact. Its more lucrative for them this way, because once someone recovers from financial failure and their credit goes up, there is more money to be taken.

Collection companies will collect on amounts starting at $25,000 or more. To avoid deficiency judgments, always take a look at the paperwork. Never sign anything that says anything about remains being owed and have the mortgage lender release any more obligations on the mortgage.

Mallory McGuinness works for a debt collection agency. She also does stories on business and finance, the credit industry and debt collection. Get a totally unique version of this article from our article submission service

Tags: bad debt collection agency, business collection agencies, business debt collection, business debt collection agencies, business debt collection agency, collection agencies, collection agency faq, collection agency fees, commercial debt collection, Mortgage Loans

Walk Away Or Pay That Mortgage? The Pros And The Cons

During the real estate boom, a lot of homebuyers extended themselves financially to buy a house that may have been beyond their means. With the market on fire, people were likely to purchase the house with low introductory interest rates and interest-only loans. They believed that their income would increase to meet their payments and predicted that real estate prices would never fall. Unfortunately, adjustable-rate mortgages have adjusted and monthly mortgage payments have gone up. Couple that with the fact that income hasn\’t increased, and you will see why more people have fallen behind with their mortgage payments.

As house prices diminish and with interest-only mortgages on the decline, more homeowners actually owe more on their mortgages than what their house is worth. It doubtlessly has occurred to many homeowners that this makes sense, as many are defaulting on mortgage payments as we speak.

Here\’s a quick breakdown to explain the situation. You buy a house for $400,000 that is now worth only $300,000. Thanks to an interest-only mortgage, you still are in arrears for $400,000. If you eliminated this off of your balance sheet, your net worth will increase by $100,000. You\’d still need a place to live, but from this point you could purchase a more affordable house or rent for a bit of time.

However there is one large drawback to abandoning your house. If you do, you will trash your credit rating, making it difficult or even impossible to rent an apartment, get a new mortgage, and even a job. There is a huge drawback to abandoning your responsibilities. If you walk away, you will destroy your credit rating, making it more difficult or impossible to rent an apartment, qualify for a new mortgage, and perhaps get a job.

New legislation has been released to help families facing foreclosure, which will try to educate people to pick options other than abandonment.

Mallory McGuinness is employed bya debt collection company. This and other unique content \’bad debt collection agency\’ articles are available with free reprint rights.

Tags: bad debt collection agency, business collection agencies, business debt collection agencies, collection agencies, collection agency faq, collection agency fees, collections agency, credit recovery agency, debt collection companies, Mortgage Loans