Owning a home has always been part of the American Dream. Consider it! You won't have to pay rent to someone else, and you won't lose any equity in the property. It's very annoying.
So frustrating that a lot of people who used to rent moved into their own homes just two years ago when the market was good. Take the California couple who got tired of renting and told their kids that if they didn't go on as many vacations and ate out as much, they could buy a house.
But even back then, the price was a killer. With a price tag of $567,000, they needed a loan that would help them get used to the high payments. They didn't have much money for a down payment, so they chose a loan with an adjustable rate, which meant their payments would be low for a few years. They thought it was just what they wanted.
The person handling their mortgage told them not to worry. They could easily refinance in two years and keep the rate low.
But now, if you don't have much money or credit, it's almost impossible to get your loan refinanced. High-risk borrowers can no longer get loans from banks and mortgage companies. So the California couple is stuck in a trap.
Worse, brokers in the area tell them that homes like theirs don't sell for more than $535,000. This means that the amount they owe on their loan is more than what their home is worth.
This same trap will catch hundreds of thousands of people. Everyone thought that the rise in home prices would keep going. They bought a house when it was easy to get credit, instead of waiting until they could afford the payments. But now that lenders have stricter rules, they won't give credit to these people.
They won't lend money because they have no collateral, no equity in their home, and are usually upside down on their loans. This doesn't happen as often as it used to. You won't lose your home if you have home equity, even if you lose your job, get a serious illness, or your payments go up like they did for the couple in California.
Check out your situation and see if it has anything in common with what is written here. If so, you should start looking for a foreclosure lawyer. Most of the time, these lawyers won't charge you anything if they can't save your home. http://www.abbey-properties.com has more information.
