Job loss does not mean home loss

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Jan 26, 2014

 

TIM'S STORY
 
Tim visited us recently with a mortgage story which we hear all too often. Tim is a construction worker who suffered an on-the-job injury and had been collecting worker’s compensation benefits for some time. The problem was that his weekly benefit of $236 a week was far less than his normal pay when working at his construction job. And despite the fact that he had a modest mortgage of $60,000, because he was raising several children on his own, he began missing his mortgage payments last May. 
 
Based on his reduced income, Tim clearly qualified for HAMP mortgage relief, which would dramatically reduce his interest payments, potentially extend the maturity date of his loan and in the end, reduce his monthly payment to an affordable level and keep Tim and his children in their home. Now the law says that Tim’s bank should assist him through the HAMP loan modification process when he reaches out for help. However, Tim did that when he first began struggling making his mortgage payments, yet his bank didn’t do what it was supposed to.
 
Instead, it put him in foreclosure. Thus when Tim came into see us, he was armed with the Complaint which sought to remove him and his children from their home. One look at the facts of his situation told us that Tim was yet another “false HAMP denial” victim. I would estimate that 50% of our clients fall squarely into this category. In this day and age of job loss and underemployment, when hard-working people are being laid off and forced to replace high paying jobs with those paying half as much, it is of no wonder that so many people qualify for HAMP mortgage relief. 
 
But one of the tragedies of today’s world is that people don’t realize that their banks really don’t want to work with them in a fair and honest way to help them succeed on their mortgages, and stay in their homes. reclosure is a profitable business for the banks, and there is no government enforcement of its own laws in this area. Thus the banks are free to run roughshod over homeowners’ rights, without fear of consequences. This leaves homeowners struggling for mortgage relief to fend for themselves.
 
In the end, Tim will gain the relief that he is legally entitled to, and not lose his home to foreclosure. It is sad to think however, how many “Tim’s” are out there, not aware of their rights and thus not so fortunate. The general rule we tell people all the time is this; “if you suffer an income loss, but still have an ability to make a make a mortgage payment which is at least 50-60% of the payment normally required, you should not 
lose your home.” If you find yourself in a position with a sudden loss of income, please keep this in mind. 
 
 
 
Note from the author: If you have questions or comments- regarding this or any Foreclosure Story article or should you like to have a “free mortgage analysis”, please visit www.mcgookeylaw.com, visit us on Facebook or call us at 419-502-7223.
 
 
Kate Eyster and Lauren McGookey contributed to this article. 
 
Copyright 2014 Daniel L. McGookey