Unfortunately, experts are warning that mortgage failures will set new records in 2009 as regulators seize banks with increasing frequency. According to data tracked by the Mortgage Graveyard, a journal of failed, ailing and acquired lenders, government loans programs and lost warehouse financing played a role in some of the bank closings and mortgage failures that follow. Another source, MortgageDaily.com reported that from January 1, through March 31 50 mortgage-related company closings. The Web site added that the annualized rate of first-quarter failures, 200, would be a big leap from 120 during 2008 and higher than 2007’s 160 — the most of any year since tracking began in 1998.
That said, do not be afraid to get financing. Of course, conduct due diligence ahead of time, before signing any documents. The good news is that governments, businesses and nonprofits are looking out for you.
Nationally, the U.S. Department of the Treasury, the U.S. Department of Justice, the Department of Housing and Urban Development, the Federal Trade Commission and the Attorney General of Illinois announced a new effort to align responses from federal law enforcement agencies, state investigators and prosecutors, civil enforcement authorities and the private sector to protect homeowners seeking assistance under the Administration’s Making Home Affordable program from criminal actors looking to perpetrate predatory schemes.
On a statewide level, the California Association of REALTORS launched a mortgage protection program for first-time homebuyers. First-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit.
In addition, the association’s Housing Affordability Fund is dedicating $1 million toward the program, and estimates that as many as 3,000 families will benefit from the program this year.
A fine example of business and nonprofits working together to help Americans with their mortgages is the Service First Mortgage in Richardson (TX) with its mortgage protection program called the WorryFree Mortgage program. That program insures that it will pay up to $1,800 in mortgage payments for six months if a buyer is laid off from their job within 24 months of the mortgage. Service First works with the Rainy Day Foundation, a Washington, D.C., nonprofit that reportedly put out $4 million in financial help nationwide in 2008, twice as much as in 2007, and they expect to lay out another $6 million in 2009.
Remember, conduct due diligence ahead of time, before signing any documents. However, when there are challenges, some rise to the occasion with solutions. These programs offer promising support and help to the mortgage buyer.