People in our community are trying hard to hang onto their homes, in many cases the lending institutions are not helping, case-in-point:
A Chico man in an industry heavily impacted by the downturn experienced a ninety percent income reduction beginning in 2006. Sensing the market collapse he and his family sold their newer home and bought a fixer in a modest location. After working a couple of low-paying retail jobs his wife eventually secured a middle management position. They’ve cutback on everything: hair-cuts, cable, food and clothing. With all of these adaptations their monthly bills still exceed their income.
For over a year they’ve petitioned the lender for a loan modification. Dozens of calls, four applications, and reams of supporting paperwork have yielded claims by the lender of lost files, inaccurate records of phone conversations and correspondence. The bank claims that estimates of the family’s monthly expenses are over-stated because grocery costs exceeded $400 per month.
With their debt growing this family must again try to make the most responsible decision. Absent a workable modification they are left with the options of short-sale or foreclosure. The home is worth $140,000 less than they owe. Why would the bank choose to take this loss rather than make changes to a loan that would eventually pay them back all of their principal with a profit?
If we want to avoid the scourge of foreclosed homes more pressure must be applied to the lending institutions to actually help troubled borrowers.
A Chico man in an industry heavily impacted by the downturn experienced a ninety percent income reduction beginning in 2006. Sensing the market collapse he and his family sold their newer home and bought a fixer in a modest location. After working a couple of low-paying retail jobs his wife eventually secured a middle management position. They’ve cutback on everything: hair-cuts, cable, food and clothing. With all of these adaptations their monthly bills still exceed their income.
For over a year they’ve petitioned the lender for a loan modification. Dozens of calls, four applications, and reams of supporting paperwork have yielded claims by the lender of lost files, inaccurate records of phone conversations and correspondence. The bank claims that estimates of the family’s monthly expenses are over-stated because grocery costs exceeded $400 per month.
With their debt growing this family must again try to make the most responsible decision. Absent a workable modification they are left with the options of short-sale or foreclosure. The home is worth $140,000 less than they owe. Why would the bank choose to take this loss rather than make changes to a loan that would eventually pay them back all of their principal with a profit?
If we want to avoid the scourge of foreclosed homes more pressure must be applied to the lending institutions to actually help troubled borrowers.
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