Sara J. Lipowitz is a Santa Cruz attorney in solo practice who specializes in bankruptcy. An attorney for eight years and a former journalist, her article below provides an excellent overview of the limited resources that are now available for coping with distressed loans.
Every day, announcements are made about new programs for distressed homeowners or changes to existing ones. Even if you’re not in default, if you’re spending too much of your income on housing or are experiencing a financial crunch, help may be available. One thing these programs have in common: They require either a new loan or a change to the terms of an existing loan. In many cases, this will be the first time real underwriting takes place based on the borrower’s income and circumstances. Lending became so lax for a period of time that responsible underwriting basically disappeared from large segments of the industry.Some of these programs and offers apply only when the lender is the note holder. Since 80 percent of mortgages have been securitized, the entity to which you make your payments may not have authority to change your loan terms.
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Posted in Oregon and Washington Mortgage Issues | By: Thomas McAvity
