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Facing up to Mortgage Shortfalls

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RISMEDIA, July 17 2007—(MCT)—Hiding out won’t help. In fact, it’s the single worst thing you can do if you’re having difficulty meeting your mortgage payment.

And these days, there are plenty of people facing that challenge. Foreclosure filings in the U.S., including notices of default, auction sale notices and bank repossessions, dropped 7 percent in June from the previous month, but were up 87% from June 2006, according to figures compiled by RealtyTrac. There were 164,644 filings, or one for every 704 households in the nation.

In Monterey County, California, there were 161 foreclosure filings for the month, or 1 for every 818 households, placing it in 25th place among the Golden State’s counties for foreclosure filings.

Time to act

If you’re one of those households, face the problem head-on, said Dan Thomas, a certified public accountant in Orange County and a spokesman for the California Association of CPAs.

“The time to act,” he says, “is before it’s too late.”

Among his recommendations:

Face up to your financial situation. If you don’t have a budget, come up with one so you know whether you can afford your house payments.

Contact your lender and explain your circumstances. A lender may prefer to work with you rather than have you default on your loan, even if it means granting you a forbearance — a temporary reduction or suspension of your payments.

If you’re facing foreclosure, it’s a good idea to get professional tax advice. Tax consequences can vary widely.

Seek counseling. Several organizations offer resources useful to distressed homeowners.

Among them:
–The Mortgage Bankers Association’s Home Loan Learning Center (www.homeloanlearningcenter.com), in English and Spanish, offers mortgage basics, advice on how to obtain a credit report, current mortgage rates and a mortgage calculator to determine the cost of a loan. The site includes a quiz to help consumers flag potential mortgage fraud and predatory lending. Being asked to provide false information on your loan application or to leave signature lines blank could be warning signs.

–The Mortgage HOPE Crisis Hotline, 888-995-HOPE, offers credit, homeownership and financial counseling, with Spanish-language assistance available. The crisis hotline is co-sponsored by Operation Hope, Inc., a national Los Angeles-based provider of financial literacy and economic empowerment programs, and First American Title. Callers at risk of foreclosure receive free financial counseling and referrals that could potentially save their credit or their home.

–California’s Department of Real Estate is the state banking authority responsible for the chartering, regulation, examination and supervision of state-chartered banks, savings banks and credit unions. It licenses and supervises the activities of small loan companies, first mortgage companies and second mortgage companies. Consumers with a complaint against a mortgage lender can call Department of Real Estate Consumer Complaints at 916-227-0782 or 559-445-5009. Spanish-language assistance is available. Make online complaints at www.dre.ca.gov, which also has a Spanish-language option.

More tips

The state of California has an online guide to home mortgage information, www.YourHome.ca.gov in English and sucasa.ca.gov in Spanish, with resources for getting help with an existing mortgage, advice from the U.S. Department of Housing and Urban Development and Freddie Mac, credit counseling services and links to register complaints against federal banks.

Tom Pool, spokesman for the Department of Real Estate, offers these tips:
–Those who don’t read English, bring a neutral family member or adviser who is familiar with the lending process to translate.
–Don’t sign anything you don’t understand, and more important, don’t sign anything that you didn’t agree to.
–Verify the validity of a real estate agent’s license in California and any disciplinary action with the Department of Real Estate online at www.dre.ca.gov, which offers a wealth of consumer information.

Copyright © 2007, The Monterey County Herald, Calif.
Distributed by McClatchy-Tribune Information Services.

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