Foreclosures
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Dr. Dena Wise
UT Extension |
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Amy Elizer
UT Extension |
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Dr. Ann Berry
UT Extension |
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Walter Battle
UT Extension |
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Chuck Denney
UT Institute of Agriculture |
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Chuck Denney
You work hard, scrape together a down payment, and buy a home - part of the American dream. But for some people, this becomes a nightmare. More than one million homes were foreclosed on last year in America - a 30% increase over the year before.
Dr. Dena Wise
"It’s sort of a vicious cycle that was driven by both lenders and home buyers - because many home buyers applied for loans they couldn’t afford.”
Chuck Denney
One out of every 123 homes were foreclosed on in Tennessee last year. We’re not the worst state for foreclosures, but we’re near the bottom ten. And the outlook for 2008 has many people concerned. Experts project another two million foreclosures nationally worth 450 billion dollars. Part of the issue – ARMS or adjustable rate mortgages. Many home buyers get them because it’s the only way they can afford the house they want. But for many, the worst case scenario did come true. The interest rate went up, but their income either stayed the same or went down.
Amy Elizer
“I’ve talked to people that are going thru bankruptcy. They were okay financially. Their credit rating was good. They got talked into something they couldn’t afford. With the way the loans were working, their payment went up every month.”
Chuck Denney
So what to do? Obviously, try to get out of that adjustable rate mortgage. A set percentage, even a high one, at least allows you to budget and plan.
Dr. Ann Berry
“If you do have an adjustable rate mortgage and it is soon going to be reset, look at your mortgage papers. If you see that you are not going to be able to meet that monthly note, contact your lender immediately because they may be able to work something out.”
Chuck Denney
UT Extension experts recommend you respond to all mail from your lender. Know your rights and learn about foreclosure laws. Watch out for foreclosure-prevention scams. You shouldn’t have to pay anything for help. And prioritize your spending. Do everything you can budget-wise to keep your home.
Walter Battle
“One young lady, she’ll pay her credit card bills, but won’t pay her mortgage. I mean, go figure.”
Chuck Denney
Even if you do all these things, you may still have too much house payment and not enough money. “For Sale” is preferable to foreclosure.
Dr. Dena Wise
“If you’ve made the mistake of purchasing a home that you just can’t afford, the best option may be to try to go ahead and sell that home as soon as possible or get out from under those mortgage payments as soon as possible.”
Chuck Denney
The prospect of losing your home is scary, but for some people, it could happen. If you’re facing this hardship, experts say set emotion aside, get help and try to think logically.
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NOTE: There is a national toll-free hotline dedicated to preventing foreclosures. That number is 1-888-995-HOPE.
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