This bitter word - foreclosure. The frustration it has brought into the hearts and minds of so many lately is overwhelming. If you are one of them, please, try as much as you can to stay calm and keep your mind clear. Don’t let anyone take advantage of your confusion. Remember - lenders are usually happier if you keep your mortgage and finally pay it off, rather then you foreclose and they get your property. There are enough scammers, though, who are exactly after your property - don’t fall into their nets. A cold mind and clear ability to analyze are your best partners against scam.

If you feel that foreclosure may become inevitable, don’t wait until it really is. There is a lot of advice (including the Chapter 13 Bankruptcy option) to be found on the Net and even more in the printed media about why and how to try and avoid foreclosure. I won’t repeat here what has already been said many times. I only want to draw your attention to one of the ways that is not mentioned so very often. Partially, I reckon, because it is targeted on quite a limited circle of borrowers, who have temporary financial problems and only need some additional time to attempt to solve them. For them a Forbearance Agreement can be a lifesaver. Read the rest of this article »

I can think of three reasons for that. One of them or any combination of them could result in such an illogical at first glance situation:
• You made an extra payment towards the principal some time ago and now it’s taking effect. The balance has become so low, that even a higher rate cannot push the actual sum of the monthly payment to its previous margin.
• The PMI got cancelled by the lender. Under the provision of the 1999 Federal law, lenders are required to cancel private mortgage insurance on most home mortgage loans made after July 29, 1999 automatically when amortization has reduced the loan balance to 78% of the value of the property at the time the loan was made. An earlier cancellation at 80% of the property’s value is likely to happen only if initiated by the borrower himself.
• If the rate has increased, but the amount of your monthly payment remained unchanged or went up insignificantly and then froze at that level, you may be in trouble, because these are the symptoms of a monthly payment cap in action. Check your mortgage contract: Is your mortgage an adjustable rate mortgage? Does it carry a payment cap? If this is the case, you should immediately look for ways to avoid negative amortization, and fast, before it increases the outstanding balance of your mortgage and wastes a lot of the effort you have put into paying the debt off.