I’m starting to get questions about foreclosure and mortgage assistance programs – it seems everyone knows someone having trouble.  In the cases I’ve been contacted to assist, I’m finding some disturbing patterns, and they all have one thing in common; the loan shouldn’t have been given (or taken!) in the first place.  The old adage “if it sounds too good to be true…” pretty much sums it up.

I won’t ‘bust’ on borrowers who are already taking their lumps, but those who refuse to ‘own’ responsibility for their situation are bound to repeat it, and frankly, it costs all of us.  Sadly, I’m seeing equity-out refi’s to pay off debts on consumer items that are long gone, and the debts were run right back up, only now, the piggy bank has already been raided.  That’s when my phone rings.

Despite the fact that Obama has been elected (yes, I’ve heard that would fix everything), rates have dropped, and a feeling of optimism is in the air with all of the news of foreclosure relief programs springing up like crocus, they don’t seem to be working, folks.

Why?

From what I’ve experienced so far, the government programs are being run like government programs, and the plans that involve contacting a lender are, imagine, using the most sane underwriting guidelines I’ve seen in years, which means that people in foreclosure or upside-down don’t qualify for the same loan Countrywide the lender was happy to give them last year.

Now, that doesn’t mean there is no hope.  By fighting property taxes and insurance costs I’ve been able to at least get payments to a more manageable level for some.  We’ll just have to keep pushing our way through the programs and see how it goes.

The Wall Street Journal has compiled a list of  hotlines and Web sites, by state, for at-risk homeowners, and it has published a summary of the various mortgage modification programs that are either proposed or currently in place. HUD and NAR also provide lists of foreclosure assistance programs by state.If you, or anyone you know is in trouble, get help.  Don’t wait.  I can’t promise you’re going to get out of it whole, but I can promise you it will only get worse if you ignore it.

-Chris