Struggling homeowners have access to resources, help

McLEAN, Va. (2/4/08)--Last week's housing reports painted a bleak picture for homeowners already struggling as subprime rates begin to adjust upward, but there are resources available to help (USA Today Jan. 30).

More than 1% of homeowners faced foreclosure in 2007, up 79% from 2006, according to a report from RealtyTrac (Jan. 29), a real estate marketing company based in Irvine, Calif. As home prices fall, homeowners discover that the mortgage exceeds the value of the house. To make matters worse, U.S. Census data put the home vacancy rate at 2.8%, with 2.18 million homes on the market in the fourth quarter.

Refinance inquiries have spiked since the Federal Reserve lowered interest rates twice last month, ABC News reported Jan. 30. However, many borrowers are stymied by lower appraisals that prevent them from refinancing into loans with easier terms (Reuters Jan. 29).

What's a financially strapped homeowner to do? Seek help immediately:

Contact your loan servicer. Don't wait, and don't be embarrassed. Provide detailed information about your income and expenses. Foreclosure is a cumbersome, expensive process, and reputable servicers prefer to avoid it.

Check out online resources. One excellent website is MyMoney.gov, which recently added new resources for homeowners facing foreclosure, according to the Credit Union National Association's center for personal finance. Click "Home Ownership" and then "Foreclosure Resources for Consumers" for links to agencies and organizations that can help.

Call the HOPE Now hotline. Dial 888-995-HOPE for access to Department of Housing and Urban Development (HUD)-approved credit counselors. The hotline was established by Treasury and HUD officials in August 2007, at the direction of President Bush.

Be on the lookout for scams. Predators are stalking distressed homeowners, hoping to cash in on the mortgage mess. So-called rescuers may trick you into selling your home for a fraction of what it's worth, or dupe you into signing documents that transfer the title out of your name.
If you're thinking of refinancing, contact your credit union, and take advantage of online mortgage comparison calculators, such as federalreserve.gov/apps/mortcalc/.

For more information, read "Calculator: Do I Want a Fixed or Adjustable Rate Mortgage?" in Home & Family Finance Resource Center.

courtesy of cuna.org