Joe and Jenny Robb came to see us in August 2012, after being sued for foreclosure on their $72,000 mortgage. They ran into problems in paying on the mortgage when Joe’s income dropped after he was forced to find a new job. With an interest rate of 6.5 percent, the Robbs were hard-pressed to keep up with their $600 per month payments. Making matters worse, Joe and Jenny had a second mortgage which added $105 to their monthly expenses. Because of their missed payments, they were about $8,500 behind on these mortgage payments when we first met.
As dire as their situation seemed to them upon our first meeting, there was little doubt we could help Joe and Jenny from the outset. This was so since they demonstrated a good faith willingness and ability to pay on their loan, and could succeed in doing so, if only their banks would offer them real mortgage relief. Of course, as I've said often in this column, in this day and age of securitized lending because it is profitable to foreclose, the only mortgage relief, if any, likely to be extended by the bank, without some "push-back," is one ultimately built to fail, and eventually lead to foreclosure for the homeowner.
In Joe and Jenny's case, the needed relief came swiftly. Less than four months after filing the foreclosure complaint, their bank offered them a loan modification reducing their interest rate from 6.5 percent to 3.75 percent, causing their monthly payment of principal and interest to fall from $459 to $317. And the icing on the cake for Joe and Jenny? The monthly payment on their second mortgage was sliced from $105 to $63. With the savings in their mortgage expense, Joe and Jenny can rest assured that they are safely in their home for as long as they want to be. The lesson in their story is that if you, like they did, just need somewhat of a break from the bank to be able to succeed in paying on your mortgage, there is no reason why you should not be able to achieve it. All you need to do is stand up to the bank and fight for your rights, while at the same time cooperate with it in obtaining fair treatment, which should lead to good results.
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Next week: Long and winding road leads to successful conclusion.
Copyright 2013 Daniel L. McGookey