Is Foreclosure the Only Answer?

In this terrible economy that we have all endured, many people are at the point of not being able to afford the home that they live in, as a result of job loss or other financial problems.  Over the last several years, banks have not appeared to work with the borrower at all.  It is hard to get answers from the banker, and sometimes hard to even find the right person to deal with.  It may appear that giving the home back to the bank through a foreclosure is the only answer, but is it?

In DuPage County, most all of the foreclosures go through a particular court.  The judge in that courtroom, Judge Robert G. Gibson, has worked with the county to establish an agency called The DuPage Homeownership Center, which is a HUD-certified nonprofit housing agency, to provide counseling to help homeowners identify realistic solutions to prevent default and foreclosure.  Their goal is to work with the homeowner to prevent foreclosures, where possible, and its services are free to all DuPage County homeowners.

Any DuPage County homeowners who use this free service must attend an orientation session, complete a counseling application packet, put together copies of financial documents needed for counseling and then meet with the counselor.  The counselor meets with the homeowner and provides the homeowner with a credit report and reviews the options with the homeowner.  The counselor provides an action plan with follow through instructions for the homeowner and follows up with the homeowner until the resolution is achieved.

It has been said that almost 45% of all residential sales in 2011 will be distress sales, either directly from the lender or by homeowners who are short selling their homes to satisfy their lender.  Obviously, with those kind of numbers, the lenders have to take a long hard look on whether to proceed towards foreclosure and further depress what they will receive from the inventory of homes that they have or will foreclose on. Instead, the lender can maximize what they can get from their loan inventory by working with the homeowner through an agency like the DuPage Homeownership Center.  If the plan worked out with the counselor works, the homeowner retains their home, keeps their family from being uprooted, has an opportunity to reestablish good credit by making future mortgage payments, and may have an attractive interest rate for the near term.  It sounds like this could be a win-win scenario.