You've Got To Pay To Stay
How To Come Back from the Brink of Foreclosure
ROCKVILLE, Md.--Interest rates are at all-time lows, home sales are
breaking records and the dream of home ownership is becoming a
reality for more and more Americans.
But for some, that dream has turned into a nightmare. Almost 1 in 20 mortgages are delinquent.
"As interest rates drop and the housing market continues to soar,
people are taking out bigger and bigger mortgages," said Mike
Kidwell, vice president and co-founder of Myvesta, a financial health
center. "Many people are stretching their finances to the limit by
purchasing more house than they can truly afford. With so much of
their income going towards mortgage payments, there's no safety net
when a problem comes up."
Kidwell advises that anyone having trouble paying a mortgage, or thinks this might happen in the near future, should keep in touch with the lender. "The worst thing you can do is cut off all contact with your lender," he said. "Too many people panic and avoid telling the lender about their situation, then try to bargain at the last minute when their house is already
foreclosed upon. By that time it's usually too late."
Kidwell offers these tips if you're having trouble making your
"A foreclosure sale is a painful and humiliating process," Kidwell
said. "We encourage people to do everything they can to avoid it.
That means recognizing the number one warning sign--always being
late with your payment."
- Contact your lender immediately. Many lenders have programs
available to help you keep your home;
- Contact a mortgage broker about refinancing your loan; you may be
able to lower your monthly payment with a new mortgage;
- If you have Private Mortgage Insurance (PMI), contact the insurance
holder--they may lend you the money to become current; and
- Consider borrowing money from friends or family.
Myvesta offers a booklet, "What to Do When You Can't Pay the
Mortgage." It can be downloaded free online from Myvesta.org, or for a
printed copy of the publication send $5, payable to Myvesta; send to Can't Pay The Mortgage Publication, Myvesta, P.O. Box 8587, Gaithersburg, MD, 20898-8587. An audio recording of an actual foreclosure sale is available online at Myvesta.org.
Founded in 1994, Myvesta, a nonprofit organization formerly known as Debt Counselors of America, offers a residential treatment program, support groups, crisis resolution, online bill management, bankruptcy
alternatives, creditor problem resolution, debt management and
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This story was published on August 7, 2002.