Consolidated Credit Counseling Services, Inc. Offers Steps to Avoid Foreclosure and Keep Personal Credit Intact
Mortgage delinquency rates have hit an all-time high in the first quarter of 2007, and many people are scrambling to avoid foreclosure. The experts at the nonprofit organization Consolidated Credit Counseling Services, provide advice about how to keep consumer's home and credit intact.
Fort Lauderdale, FL (PRWEB) May 1, 2007 -- Mortgage delinquency rates have hit an all-time high in the first quarter of 2007, and many people are scrambling to avoid foreclosure. The experts at the nonprofit organization Consolidated Credit Counseling Services, provide advice about how to keep consumer's home and credit intact.
Many people are in deep trouble due to subprime mortgages. A subprime lender is one who lends money to borrowers who do not qualify for loans from mainstream lenders. Usually, the culprit is having a low credit score due to a lack of debt management. A subprime borrower cannot qualify for prime financing terms. Someone with a mediocre score might or might not qualify for traditional financing. This usually depends on the down payment amount, the ratio of total expenses to income, and ability to document income and assets.
"The expansion of the subprime market has made mortgages and home ownership available to a part of the population that would have been shut out of the market, but now many people are having trouble trying to avoid foreclosure due to 'exotic' mortgage terms," says Howard Dvorkin, CPA, author, and founder of Consolidated Credit Counseling Services, Inc.
Dvorkin offers advice to those who may be faced with a the threat of foreclosure:
| | - Make house payments on time. If you think you are going to be late, call your lender and let them know. They may be willing to work with you if you are candid about your debt management issues from the beginning.
- Concentrate on your monthly budget. To get back on track with your mortgage, you need to determine your monthly expenses and income. Look at where you can cut back so that you can put more money towards your mortgage payments. Use the free Budgeting Made Easy guide to help you figure out where you may be able to save money.
- Speak to the right person. When you speak with your mortgage holder, make sure it is someone who actually has the authority to work out a viable solution for you. Take comprehensive notes of every conversation and meeting you have with your lender.
- Ask about options. You may be able to get a forbearance, or a request to suspend or temporarily reduce your payments. You'll need to have documented proof -- such as recent pay stubs, bank statements, etc. -- that you are trying your best to pay the bills.
- Ask how your credit score will be influenced. If you can't avoid foreclosure, ask your lender how your credit score will be affected so you know what you're getting into.
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"Many people have ended up with a subprime or non-traditional mortgage because they have been solicited by subprime lenders and go along with the deal pitched to them without ever contacting a mainstream lender. Very few subprime loan officers will give up a commission by referring a qualified applicant to a mainstream lender. The deal will very likely go down at sub-prime prices, regardless of how qualified the borrower may be," Dvorkin continued.
Here are some guidelines to prevent people from being trapped into a subprime mortgage:
| | - Never respond favorably to a solicitation without first checking into other options.
- Do not get a quote from just one loan provider, talk to several.
- Check your eligibility for financing with mainstream lenders. Look on-line at BankRate.com and Interest.com for rates and information.
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For more information about the housing market and debt management, please visit our website at http://www.consolidatedcredit.org/.
Consolidated Credit Counseling Services mission is to help people end financial crisis and solve money problems through education and professional counseling. Consolidated Credit is an industry leader providing credit counseling and debt management services throughout the United States. Consolidated is a non-profit agency that has helped thousands of individuals and families deal with life-altering credit, debt and financial issues.
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