The saddest calamity that can happen to any family is to lose the roof over their heads. In the past year the issue of foreclosure notices has reached epidemic proportions - an increase of 22.5%.
In the ten months to November 2011, the Supreme court of New South Wales issued 2466 writs of possession to allow mortgagees to take control of homes with mortgage arrears. The residents are forced to vacate - sometimes forcibly assisted by the Sheriff. It is chilling for people to find themselves homeless - with their possessions dumped beside the road - and with nowhere to go.
The reason families find themselves in trouble are varied, but high on the list are job losses. We live in uncertain economic times and even " safe " jobs can suddenly disappear. Illness is another prominent reason, and relationship breakups obviously divide the numbers contributing to keeping the loan afloat.
Saddest of all is how this affects little kids. In one moment the safety of living in a nice home with a caring mum and dad is shattered - and life suddenly becomes a nightmare of short stays with relatives or friends, and the inevitable gaps when the family is living in homeless refuges.
Foreclosures have always been with us, but the chaotic state of world finances is putting added pressure on the industries we rely on for jobs, and there are no indications that this will start to improve anytime soon. Now is a good time to take stock of the options - and to deal with a mortgage crisis in a calm and professional way.
The greatest mistake those slipping into mortgage arrears make - is to ignore it. Some do this in the hope that it will miraculously " go away ", but of course it doesn't. The wise will immediately seek out the bank or building society and be frank about their situation. Lenders are emphatic that foreclosure is their absolutely last choice. In most cases, the problem causing the loss of funds is only temporary, hence some sort of bridging arrangement will tide the borrower over - and the crisis will be averted.
In many cases the mortgagee will alter the loan terms to reduce payments to an affordable level. Often all that will be required for a period of time will be the payment of interest, while the repayment of capital will be deferred until a later time by extending the loan period.
Most people have scrimped and saved to find the deposit to allow them to buy a home. It is usually the biggest financial transaction they will make in their entire lifetime. Not only will foreclosure deny them an asset to fund their retirement and pass on to their children, it will damage their credit rating and reduce their chance of recovery - and again buying a home - when conditions improve.
The best advice anyone can give to those with a mortgage payment problem is to immediately go and talk to the mortgage holder. To do so greatly enhances the chances of surviving the crisis - and keeping your most valuable asset intact !
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