Political pressure on lenders to prevent foreclosures

April 25, 2007 | Foreclosure |  4 comments

The banks really don’t want your house. It is a costly event for them to foreclose on your property. The average cost of a foreclosure is $40,000. In addition there has been an increasing amount of pressure placed on banks to provide bailout solutions to troubled homeowners.

The Federal Reserve, Congress, the Senate, and presidential candidates are all paying attention to the issue of record foreclosures, many of which are a result of adjustable rate mortgages (ARMs) and subprime lending. In addition, agencies like Fannie Mae, Freddie Mac, and the Federal Housing Administration have begun putting pressure on lenders to offer more options to borrowers in trouble. As a result, there will be more help than ever for borrowers to work out a way to stay in their homes.

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Reader Comments

Jim Crary on October 12, 2007 at 8:25 am

How are determing the cost of foreclosure? Where could I get the acutal cost of foreclosure and the carring cost the bank incures for holding the loans till it is sold?

Tom Voli on October 12, 2007 at 9:02 am
tom@tomvoli.com

Great Question but I do not have the answers unfortunately. Anyone else?

Julie on August 16, 2008 at 4:14 pm

I got an ARM two years ago at 8.94% with the understanding I could refi after 3 yrs. Its an interest only. Now I’m being told by lenders that I won’t be able to because I should have never qualified for the loan in the first place. Of course my home isn’t worth what I paid for it and I have no equity. I’m able to make the payments now but won’t once the rate adjusts. What options would I have other than most likely having to do a short sell.

Tom Voli on August 20, 2008 at 8:05 am
tom@tomvoli.com

Julie,

Contact the lender you have now and talk with them about this. Many lenders are freezing the rate for an additional 3 years to give borrowers a chance.

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