Wednesday, December 14, 2005

Most Foreclosures Occur 'Without A Whimper'

Broderick Perkins at Realty Times looks at how people react in a foreclosure. "Homeowners facing default on their mortgage too often take the head-in-the-sand approach and leave their No. 1 asset exposed to foreclosure. Even after the mortgage servicer calls delinquent homeowners about late payments, too many of them too often turn to denial and procrastination, death knells for home ownership."

"Unfortunately, in more than half of all foreclosure cases, the borrower never contacts the lender and loses the home without a whimper. A survey found that 75 percent of delinquent borrowers recall being contacted by their mortgage servicer, the company (the lender or the lender's agent) that collects mortgage payments. Among those aware enough to recall the contact, 68 percent never called back, 28 percent because they were in denial claiming there was no reason to talk to their servicers or that the servicer could not help."

"Likewise, 17 percent said they didn't need any help with their payment, even after a call about delinquency, and 7 percent played the procrastination game and didn't return the call because they didn't have enough money at the time to make the payment."

"Others said they didn't return the call because they were just plain embarrassed (6 percent) about it all; they were afraid (5 percent), or they claimed they didn't know who to call (5 percent)."

"The survey is real cage rattler for home owners who don't want to lose their homes and for servicers who don't want their lender in the business of selling foreclosed homes. What's more, the survey comes at a time when experts are forecasting the potential for more foreclosures due to flattening home prices and home owners have tapped out their equity."

"'The results of the Freddie Mac/Roper survey are a wake-up call to delinquent borrowers everywhere,' said Ingrid Beckles, (with) Freddie Mac."


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