Counseling to Avoid Bank Foreclosures

by Peter Vernon on Stop Foreclosures

Several programs are available for distressed homeowners in Missouri who want to save their properties from foreclosures. One of the most popular forms of staving off bank foreclosures is counseling.

According to industry experts, a face-to-face discussion of their financial situations helped many homeowners renegotiate their debts to avoid foreclosures. When homeowners received notices threatening foreclosure, their lenders offered them three options.

The first is a quick sale of their distressed properties, meaning that with the agreement and consent of their lenders, they will sell their houses at less than their total mortgage due.

The second option is for them to extend their mortgage loans under not so favorable mortgage adjustable terms. Or, their third option is to talk to strangers and tell them about their current financial predicament.

Industry experts said that distressed homeowners who want to save their properties from foreclosures can easily get referrals for foreclosure counselors. Counseling services have become very common in communities in Missouri, especially in areas hardest hit by the foreclosure crisis.

They said that counseling is effective in preventing foreclosures against homeowners who experienced a loss of income or illness.
People who worked on counseling programs said that demand for their services has increased by almost one-third in the first half of this year as the number of foreclosed properties continues to rise because of massive layoffs and adjustable-rate mortgages.

In the city of St. Joseph, 915 foreclosure filings were posted from July of last year to June of this year. The figures represented 2.5 foreclosures daily. Last month, 4 percent of homeowners in St. Joseph were behind on their mortgage payments by at least 3 months. And lenders foreclosed on about 1 percent of these troubled loans. The city's foreclosure rate increased by 0.4 percentage point, compared with 2008.

According to counselors, they have agreements with some lenders to work out loans of eligible homeowners. They said that most often, they have prevented properties from being placed in foreclosure auctions. They added that in the event that homeowners do not want to hold on to their properties anymore, ownerships may be transferred to lenders without affecting the credit scores of homeowners.

Counselors said that many homeowners just do not realize that their lenders are willing to work out solutions for them to remain in their homes.