Homeowners who are struggling to make their mortgage payments naturally may wonder what's going to happen when and how they can help themselves remedy their situation.
In most cases, there are three basic suggestions that make good common sense, almost without regard to the specific circumstances.
1. Don't ignore the problem.
2. Be realistic about the possible solutions.
3. Consult a knowledgeable and trusted advisor.
That advice comes, in a roundabout way, from Shari Olefson, a real estate attorney with Fowler White Boggs in Fort Lauderdale, Fla., and author of "Foreclosure Nation," a book about the home foreclosure crisis.
"The three biggest mistakes people make," Olefson says, "are ignoring the problem; not being realistic about what their alternatives are, who's really responsible, what's going to happen and what the bank will accept; and picking the wrong person to help them, which is the same mistake a lot of people made on the way in. You have to be careful who you trust."
Struggling homeowners also need to read their loan documents and open their mail from the loan servicer, Olefson says.
"People didn’t read their loan documents at the closing table, and they're still not reading their loan documents," she says. "They haven't read them because it's not as interesting as People magazine. If you know you're going to default, and (you want to know) when can the bank do what? Pull out your note and your mortgage, and it's right there. It says how long you have to be in default, when they have to give you notice, how long they have to give you to cure (the default). After that's over, the timing is just a matter of what the lender's policies are, how busy their lawyers are and how backed up the court system is."
That may sound simplistic, given the complexities of mortgages and foreclosure procedures, but it's truly not at all a bad place to start. Loan docs may not be as sexy as a celebrity magazine, but they do contain a lot of important information that's right there on the page.