Mortgage & Foreclosure

Mortgage Payment Problems
From online news, it is stated that the three most affected states (in U.S) reveal the two main causes of mortgage payment problems: economic weakness, as exemplified by Ohio, and speculative excess that led to high home prices and unaffordable mortgages, as represented by California and Florida.

Slowing Economy
All signs have indicated that the US economy is worrying. This range from sub-prime (and credit) to slowing economy (job losses). Some companies and plants have closed, job losses have risen, and both have hit some states' economy real hard.

Subprime Mortgages and Potential Defaulters
Statistics have show that there are about 7.2 million households with subprime mortgages, and more than 14 percent of those are in default. It projects that one of every five of those loans issued in 2005 and 2006 will end in foreclosure, with 2.2 million families losing their homes

Back Home - Singapore
Coming back to Singapore, the government recently intervent into the property boom, with runaway prices. To speculators/investors, this may not be a good sign, but for the overall economy, we have to agree that it will avoid our tiny city state from a property meltdown years down the road.

The problem is, a lot of people (ignorant speculators) bite more than what they can chew, forgetting that what they chew will bite them back when they have difficulties. Why live in self-deception that our salary will increase by the years (this is old school of the 90s) thus we can afford to live on the line and things will improve next year? These people are the ones hardest hit when there is a turn in the economy (for the worst).

Tips to Avoid Foreclosure Or Lender's Legal Suit
1. Don't Ignore The Problem
Identify the problem and deal with it sooner. The longer you drag, the more likely you'll get into trouble with your lender.

2. Contact the Lender
Lenders are not out to make a borrower a bankrupt or to seize your property. Negotiate with them a solution/package.

3. Open and Response to Mails from Lenders
Warnings/Reminders will be given by lenders before they take action. Act before they do.

4. Know your Option
Should a borrower be haul to Court, know what your options are. Bankrupcy is the last option and should be avoided.

5. Consult People With Better Insights
When one is in trouble, their mind is usually clouded. Consult someone or a professional who has a clear mind and more knowledgeable.

6. Reduce Liabilities While You Can
Why wait till you have lost ground before acting? Rid your financial burden (eg, car) to give yourself more financial ability to deal with the forecoming problem.

7. Prioritize or Restructure Your Spending
Refer to my other post, "Ways To Save" to see how you can reduce expenses/spending. The spare funds will go a long way.

8. Forget About Pride and Ego
Many falls into this trap and not seek or listen to sound advise. I've come across such individuals till situation gotten so bad. There's no big deal in loosing it all today, as you can gain it all back one day if you buck up and learn how to better manage your finances.