COLUMBUS — In 2007, one of every 56 households in Ohio became engulfed in some stage of foreclosure. The figure, reported by the housing data firm RealtyTrac Inc., makes Ohio’s rate of foreclosures the sixth-highest in the nation.
And in December, the Mortgage Bankers Association reported that one of every nine Ohioans with a mortgage had become delinquent in their payments, not including those that had entered foreclosure.
“The people I talk with who are in trouble have experienced job loss or a family illness — that’s what’s happening,” said Susan Shockey, family and consumer sciences educator with Ohio State University Extension in Franklin County.
Check the budget
“The first thing I do is help them look at their budget. Many don’t know where their money is going.”
Shockey, who is also an associate professor with Ohio State University Extension and a member of Extension’s statewide Healthy Finances Team, said homeowners who realize they can’t make a mortgage payment often become immobilized in fear and panic.
But being proactive is key, she said, and homeowners who anticipate missing a mortgage payment must find their bearings.
“First, you need to take a deep breath,” Shockey said. “You need to regain your confidence and have some idea of a plan of how to work things out.”
Shockey agrees with the standard advice that it’s important to contact the lender as soon as you know you’ll have a problem with a mortgage payment.
But, she added, “When you contact the lender, you don’t want to agree to something you can’t afford. You need to be an advocate for yourself, and that can take some planning.”
Attorney
Shockey said that once a household gets three months behind in mortgage payments, “you really need to work with an attorney, or if you’re comfortable doing so, work directly with the lender if you haven’t already done so. Explain the situation and ask about ‘special forbearance,’ which looks at individual circumstances to get a temporary reduction in payments.”
Modifying the mortgage, or refinancing, is also a possibility; be sure to ask about reducing the normal fees associated with refinancing.
“The best route is to get a fixed rate (of interest) and possibly extending the term of the loan to reduce monthly payments,” Shockey said.
“And ask about reducing the principal owed. That’s sometimes possible.”
Extension has tools to help people get a grip on their finances, which could help prevent foreclosure.
Tools
Those tools include:
“Consumers can go to this fact sheet to keep track of spending and see if there are any ways to cut flexible expenses by saving money on groceries, for example, or laundry, or the phone or cable bill,” Shockey said.
Extension resources
Those tools and more are available on Ohio State University Extension’s “Ohioline” Web site. Go to http://ohioline.osu.edu, click on “Home,” and then click on “Finance.”
They are also available for purchase through county offices of Extension, often listed under county government listings in the phone book.
Other good Extension resources include the University of Wisconsin’s Talking with Creditors and Purdue University’s Plan to Pay Creditors.
