I was watching the news this morning and saw a report on home foreclosure. This young couple bought their first home two years ago. At that time, they were both working. He lost his job. They, of course, fell behind. They contacted their mortgage company, Chase, to see what could be worked out. Chase suggested forbearance, but they were turned down because of the husband not having a job. He did find another job. They managed to save a little less than $2000. They contacted Chase again, and were told they owed about $2000 in arrearage plus another $2500 in legal fees. They were turned down, yet again. It was foreclosed on October 30, 2008.
This is exactly why we are in this economic turndown. The solution seems so simple to me. Forgive the legal fees, either accept the monies that they have raised, or tack the difference to the end of the loan (in other words, rework the loan). If this had been done, we wouldn’t be looking at another REO property hitting the market, to languish on the market for months or years, losing value for all of the properties surrounding it. Ultimately, losing revenue for the local municipality. Maybe it is a simplistic solution, but maybe we have been over thinking the solution. Maybe what we need is people helping people to make it through this difficult time that we are all facing. I am tired of reading articles about short sales. I want to see how we can help some people stay in their homes.
So, what is our money being used for?