Q: What should I do if I’m facing foreclosure on my home?
A: Buying a home is a rewarding, yet scary venture for many individuals. Whether living in the city or on a farm, figuring out how to afford a mortgage payment never escapes one’s mind. Right now, many people are going through tough times and wondering how they will come up with the money for that next payment. For anyone in that position, it’s important to remember that a lot of good can come out of talking to your lender and other experts. According to a national statistic reported in the Des Moines Register, 60 percent of those who had foreclosed homes never spoke with their lender before the foreclosure process began. The Bush Administration has established the Hope Now Alliance, to provide help to homeowners. The Alliance can assist homeowners create a unified, coordinated plan to help them stay in their homes. Homeowners can call the Alliance hotline at 888-995-4673, the Iowa Attorney General’s Mortgage Foreclosure Hotline at 877-622-4866 or visit www.iowamortgagehelp.com. Housing counseling agencies are another good resource. There are many approved counselors in Iowa listed on the U.S. Department of Housing and Urban Development’s web site, www.hud.gov. People who have high mortgage payments due to adjustable-rate mortgages can work with these organizations and a lender to try to renegotiate the loan.
Q: What is being done to help with the foreclosure problem?
A: While homeownership is at record levels in the United States, we’re seeing many borrowers at greater financial risk. People are more likely to default on their loans because of poor underwriting standards and little oversight of exotic mortgages. Many experts agree that the market needs to self-correct as much as possible and that a wholesale bailout would be a short term fix that doesn’t help those who worked hard to find a mortgage they can afford. Congress has taken steps to address the increase in foreclosures and keep the economy strong. Last month, the Senate passed the Foreclosure Prevention Act. It included about $10 billion to refinance subprime loans and to provide mortgages for first-time homebuyers and multifamily rental housing. In February, Congress also appropriated $180 million for mortgage foreclosure mitigation activities and another $50 million for counseling programs. Iowans will also see rebate checks over the next several months, which were included in an economic stimulus package passed by Congress earlier in the year. That same legislation provided a temporary increase in loan limits for the Federal Housing Administration, Freddie Mac and Fannie Mae in order to expand affordable purchasing and refinancing opportunities. Moreover, there is a need for greater transparency and to conduct rigorous Congressional oversight of lending practices. In addition to individual responsibility, vigilance over lending practices is continually needed to make sure homeowners aren’t being suckered into exotic mortgages.