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Worried about mortgage payment? Go local.

By: 20 November 2011 One Comment

TransUnion released a report stating the mortgage delinquency rate for the third quarter has risen for the first time since the last quarter of 2009.

The credit bureau had initially forecast a decline in the delinquency rate. The national delinquency rate – which serves as a snapshot of how many people were 60 days or more behind on their mortgage payments – was 5.88 percent in the third quarter. For the record, Arkansas fared better than the national average at 3.62 percent.

Believe it or not, the ramifications of the so-called subprime mortgage crisis continue. Many of those mortgages featured terms that went in place within five years of the mortgage. On an adjustable rate mortgage, for example, the initial interest rate might have been favorable, but it reset after five years and potentially increased the monthly payment by hundreds of dollars.

Some of those borrowers couldn’t make the higher payments, leading to the soaring foreclosure and delinquency rates we’ve seen over the past few years. Since the subprime lending industry was writing mortgages through around the first half of 2007, there are still some homeowners out there waiting for their terms to reset. Economists have pointed to the fact as one of the primary reasons for forecasting high mortgage rates through 2012.

At any rate, high delinquency rates have predictably led to a demand for mortgage assistance. Naturally, people want to keep their homes and seek alternatives when their mortgages become too expensive for them to handle. It might be that they’re dealing with mortgage payments that have suddenly increased or are just having trouble making ends meet due to the changing financial circumstances that come with a sluggish economy.

The state of affairs has caused some scammers to pop up around the nation – for a fee, they’ll promise to do everything from negotiating lower mortgage payments to finding government programs that will help people worried about losing their homes.

Some of those problems are legitimate, but some of them are not. Caution, then, is recommended when approaching any organization that offers a cure-all solution to mortgage woes for a price.

It’s important to remember that there are a lot of foreclosure sales taking place these days and lenders are none too happy about that. They are not in the business of listing and selling property and generally lose money when they have to take a home back through foreclosure and sell it. Lenders, then, often want homeowners to keep possession of their houses and keep making mortgage payments.

Your local lender – the bank through which you initially took out your mortgage – should often be the first destination for people facing mortgage payments that have become burdensome. Your local mortgage banker isn’t going to charge a fee to find some ways to help out and may well have a solution to suggest that will well for you. Is it possible to refinance at current low interest rates? What programs – government or otherwise – are available that might help?

Mortgage bankers keep up to date on what help is out there for borrowers going through rough times. Of course, they can’t share that information with troubled borrowers who don’t get in touch and ask.

Home Sweet Home is written by Ethan C. Nobles and is sent weekly to publications throughout the Natural State on behalf of the Mortgage Bankers Association of Arkansas.

About: Ethan C. Nobles:
Benton resident. Rogue journalist. Recovering attorney. Email =

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