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Delinquent borrowers persist in the American dream

By Polyana da Costa · Bankrate.com
Friday, November 1, 2013
Posted: 4 pm ET

Homeowners who are behind on their mortgage payments have become a bit more optimistic about homeownership.

About 4 in 10 delinquent borrowers say they think home prices will climb in the next 12 months, shows a recent survey released by Fannie Mae. A year ago, only 2 in 10 believed prices would rise.

"The majority still believes in the financial and lifestyle benefits of homeownership," Steve Deggendorf, director of economic and strategic research at Fannie Mae, says of the report. "This counters claims that the United States is likely to become a nation of renters"

Owning a home is a better way to build wealth than renting, say nearly 3 in 4 respondents in the survey.

Not all roses

But that doesn't change the fact that these borrowers are still struggling to pay their mortgages.

About 43 percent of the delinquent borrowers in the survey say their financial situation got worse over the last year. That’s down from 61 percent from the previous survey.

The majority of these borrowers say they have tried to refinance their mortgages in the past two or three years, but many say they have not applied because they do not believe they qualify for a refinance and they don't trust their lenders, the survey shows.

Here is a tip: Don't assume you don't qualify for refinance or loan modification before applying for it. Often that's a misconception and could prevent you from a deal that will reduce your monthly mortgage payments. That's especially true for borrowers with mortgages carrying an interest rate of 6 percent or above.

Have you tried refinancing recently? How did it go?

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1 Comment
Will Martin
November 02, 2013 at 7:29 pm

If they borrow too much, Americans get taxpayers and bank stakeholders to pay off their mortgages for them. What's not to love?

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