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Foreclosed owners speak out

By Marcie Geffner · Bankrate.com
Wednesday, February 23, 2011
Posted: 10 am ET

If the national foreclosure crisis had an epicenter, it would have to be Las Vegas, since Nevada is more often than not at the top of any state-level list that involves foreclosure statistics.

Now, "The Face of Foreclosure: An Analysis of the Nevada Foreclosure Crisis," a new report from the Nevada Association of Realtors, has presented some startling findings:

  • Twenty-three percent of the homeowners surveyed for the report admitted they had strategically defaulted or walked away from their mortgage, even though they had the financial ability to make their payments.
  • Sixty-one percent of the homeowners said they hadn't heard of the federal government's Home Affordable Foreclosure Alternative program. Only 3 percent said they'd received help from the state's foreclosure mediation program, and fewer than 50 percent said they knew about the federal government's MakingHomeAffordable.gov website.
  • Nearly half the homeowners placed the most blame for the foreclosure crisis on banks and lenders. Homeowners also expressed great frustration at their inability to talk to anyone who was authorized to take real action on their loan.
  • No solid evidence supported the argument that most foreclosed homeowners were simply victims. "By their own admission in both research and conversations, many homeowners were in untenable financial situations. Many of those surveyed were spending an incredibly unhealthy amount of their monthly income on housing," the report stated.
  • Still, many homeowners were affected by circumstances largely out of their control. Those who experienced two or more such "trigger events" at the same time were more likely to lose their home.

The most frequently cited events, in order, were loss of a job, unexpected medical bills, other bills, a new household member and the death of a family member. Also mentioned were tax increases, the death of a mortgage payer, theft or robbery, and being arrested.

The report was based on statistical data, two focus groups and more than 1,000 telephone interviews with homeowners who personally experienced or narrowly avoided foreclosure or lived in a high-foreclosure neighborhood.

Banks, apparently not consulted, might have had different opinions.

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6 Comments
michaeall breen
April 04, 2011 at 1:24 pm

I fell behind on my taxes and my escrow added an additional 1100.00 a month.I told the bank i couldnt afford that increase,so they said they would put me on their modification program.I answered some financial questions on the phone,the next 7 months i was on their modification program.I then get a letter saying i dont qualify for modification.the bank then said i could apply for a different program.Filled out 15 pages of paperwork sent via fed express i called a week later they had no record of my paperwork.Twice again sent papers they got them now a month had gone by.I call up and was told i had missing paperwork so i was disqaulified the lady couldnt tell me what i was missing even though i checked on status evry week.I then was told i may qualify for presidents program filled out same papaerwork all over again sent it in lost some of my tax returns they said i sent them again same day.Everything looks good to modify im told on phone.Three weeks later a letter saying dont qualify going to have to short sell.Ihave the income to pay for a loan i was paying 1400.00 a month i wanted to keep my house.Bottom line is they want to foreclose and the modification program is a joke you never can talk to the person making the decesions and i have the ability to pay.Just two weeks ago i was told to put in again for a foreclosure modification and in 10 days told my credit isnt good enough we can jhelp with a short sale.In all 5 modification apps well over a hundred dollars in postage and faxes with no results.

Mitsy
March 23, 2011 at 1:58 pm

I agree with another poster that adding a new family member or being arrested ARE within a mortgage holder's control. Don't have more kids if you can't afford them and keep yourself out of being jailed. How hard is that? As far as other bills go, I know that medical bills are put in a different category than other bills. Most hospitals have to take what you are paying each month & as long as you are making payments, they can't sue you for the rest of the bill. I suppose they can try, but it is futile on their part unless they want someone to file for bankruptcy which in turn would mean zero for the hospital.

Some circumstances might be out of someone's control (job layoff for instance) but most other situations can't be blamed on outside circumstances.

KJV
March 21, 2011 at 4:18 pm

With the huge amount of banks failing the Gov't had to step in to back (ie - insure for loss) many mortgage loans so other banks would come in & take them over. Because of that set up, unfortunately, in far too many cases, the banks actually reduce their loss by having the borrower default & take it thru foreclosure. Besides being unfair, this is also a huge waste tax payer dollars.

David
March 14, 2011 at 5:38 pm

Circumstances largely out of their control included:

Other bills
A new family member
Being arrested

Intersting, because it seems none of these things is out of their control.

Paula Hopper
March 08, 2011 at 6:47 pm

As a victim of foreclosure, I just want to say that unlike some we did not strategically default and it was incredibly frustrating to deal with a mortgage lender that was too stupid to realize that we never asked for a hand out only a hand up by just trying to get payments reduced for a short time, but instead...had to walk away. I think it would have been much more productive for both sides to have made a small compromise; but who am I to say?

donald gotshalk
March 04, 2011 at 9:21 am

Homeowners also expressed great frustration at their inability to talk to anyone who was authorized to take real action on their loan. This really bothered me. Is this an accurate average scenario at most banks? If it is and I suspect it is not, than this is where the government should step in? Whether it is or not, this is a problem where a clear process in writing should be available and automaticaly notified as available to a late payer sent through the mail and followed up with a phone call and possibly a personal visit from a bank personel?