Foreclosure: When The American Dream Becomes A Nightmare

By: Hari Sreenivasan
Topics: Field Notes

(CBS/John Filo)

Hari Sreenivasan is a CBS News correspondent based in Dallas.

There are lots of reasons that get people into financial trouble, which forces them to miss a mortgage payment, then two, then maybe three- before they get that letter in the mail from their mortgage lender turning their American dream of home ownership into a nightmare. There are expected to be more than a million foreclosures this year.

There are those Adjustable Rate Mortgages out there which, as their name implies, are adjusting. A lot of people took the up front savings, lured by the lower monthly payments, and ignored budgeting for the planned increase. Some people, who shouldn't have qualified for loans in the first place, were lured into bad deals by predatory lenders; others have just had unexpected financial hardships from medical expenses to divorce and death.

(If you are on the brink of foreclosures, check out these tips from the U.S. dept. of Housing and Urban Development.

To find a legitimate counseling service near you, that will likely work with you for free or a small administrative fee check out HUD or just call 1888-995-HOPE. Or check out an active campaign, designed by Ad Council (the same people who helped with the "Just Say No "to drugs campaign) that reminds people that nothing is worse than doing nothing.

There also seems to be this underlying feeling that banks are interested in taking over your home. I don't know too much about real estate or banking, but I don't think banks want to get into the home ownership business. I think a bank would much rather have you make payments on time and make their money from the interest.

But as we mentioned in the piece, and as the ad campaign is trying to stress, there is help out there -- and it starts with a phone call. These agencies can help present a case to the lender which may qualify the homeowner for a repayment plan, or having past due amounts tacked onto a longer mortgage term. These are of course just a few of the ways that you might be able to keep the roof over your head. There are more drastic measures but it is a case specific set of recommendations. But the homeowner has to take the first step.

3 Comments Have Your Say
Email Story Send to a Friend
Share This Tell Your Friends
Tweet This Tweet This
More Share It

Add a Comment


by lemusique-2009 July 27, 2007 11:10 PM EDT: I blame the loan officers for putting these people into loans that they could qualify for - but really couldnt afford. We must educate our communities on what to do before buying, what to do when in a mortgage - and what to do to have something to fall back on in hard times.

We all know though that there are people that have nothing to fall back on.

I am grateful that there are organizations like The Impact Group USA in Pine Mountain, GA that help people all over the country. I just wish their were more local branches. I do know they will even pay the arrears in part or in full to people in need. As a loan officer, I have sent clients through them when I could not refinance them and didnt know what else to do for them. They helped.; Reply to this comment


by leopoldthelm July 27, 2007 3:12 PM EDT: I thought I did not have anything to say about this piece or blog, because I have never been into foreclosure. I have put everything before the desires of my heart, so I put my mortgage first.

People never know about an unexpected death, devoice, and many times the devoice is caused by overwhelming bills, etc.

What I can tell SOME, especially women! You have to let some things go:

Beauty Salon visits with those expensive manicures, pedicures, hairstyles, cuts, and expensive clothes for you and the kids.

Normally when people get the house they want the expensive cars, I got an expensive BMW after being in my house 10 years. Guess what, the BMW is gone, I donated it to charity, and got a great tax write off, but I still have my house.

Most people do not know the laws about houses; what the reporter is telling you is true. The mortgage company does not want your home, they are out to make money. The economy is move by steady home owners! You see the American Dream is not your dream, the desire to own a home is put there by American investors.

It is costly in owning a home: maintaining, insurance, reparis, improvement. . .there is a lot. . .expensive items dressing the home to impress friends. All I can say as a homeowner, it might be cheaper to rent!

-great story-; Reply to this comment


by ralphj53 July 26, 2007 11:49 PM EDT: July 26, 2007

Hello;

I live in NORTH DAKOTA... and I am SO LUCKY! Why?
Because here in North Dakota, I can STILL buy a three bedroom, one bath home.... for a PALTRY.... $10,000.00 to $12,000.00 CASH!! If I LOOK hard enough. And this takes TIME! also, when you work for a living... THAT also takes time.

Oh sure, I may buy it out there in TIMBAKTU.... but.... it's STILL my AMERICAN DREAM... and I don't have to sweat the SMALL STUFF!!!

If I want to work here in BISMARCK, I SIMPLY.. RENT a one bedroom apartment, with GARAGE and OFF STREET parking... for $350.00 per month.

And... there is LOTS of work out here in BISMARCK!!! I guess I am just LUCKY!! I can still enjoy the comforts and PEACE of small town AMERICA, and STILL have my AMERICAN DREAM!!!

It's like, I GET to keep the CAKE and eat it too!
You see, like my aunt used to say..."There's more than one way to SKIN a cat!!"

Thanks,
ralphj53; Reply to this comment