Mortgage Payments Sending You Reeling

Document Sample
Mortgage Payments Sending You Reeling Powered By Docstoc
					Mortgage Payments Sending You Reeling?
Here's What to Do ...
                                                                  you can’t tell by reading the mortgage
                                                                  documents you received at settlement,
                                                                  contact your loan servicer and ask. A loan
                                                                  servicer is responsible for collecting your
                                                                  monthly loan payments and crediting your

                                                                  Here are some examples of types of
                                                                     ●   Hybrid Adjustable Rate Mortgages
                                                                         (ARMs): Mortgages that have fixed
                                                                         payments for a few years, and then
                                                                         turn into adjustable loans. Some are
                                                                         called 2/28 or 3/27 hybrid ARMs: the
                                                                         first number refers to the years the
                                                                         loan has a fixed rate and the second
                                                                         number refers to the years the loan
                                                                         has an adjustable rate. Others are
                                                                         5/1 or 3/1 hybrid ARMs: the first
                                                                         number refers to the years the loan
                                                                         has a fixed rate, and the second

                                                                         number refers to how often the rate
      he possibility of losing your home because you             changes. In a 3/1 hybrid ARM, for example,
      can’t make the mortgage payments can be                    the interest rate is fixed for three years, then
      terrifying. Perhaps you are one of the many                adjusts every year thereafter.
consumers who took out a mortgage that had a fixed
rate for the first two or three years, and then had an       ●   ARMs: Mortgages that have adjustable rates
adjustable rate thereafter. Or maybe you’re                      from the start, which means your payments
anticipating an adjustment, and want to know what                change over time.
your payments will be and whether you’ll be able to
make them. Or you could be having trouble making             ●   Fixed Rate Mortgages: Mortgages where the
ends meet because of an unrelated financial crisis.              rate is fixed for the life of the loan; the only
                                                                 change in your payment would result from
Regardless of the reason for your mortgage anxiety,              changes in your taxes and insurance if you
the Federal Trade Commission (FTC), the nation’s                 have an escrow account with your loan
consumer protection agency, wants you to know how                servicer.
to help save your home, and how to recognize and
                                                         If you have a hybrid ARM or an ARM and the payments
avoid foreclosure scams.
                                                         will increase — and you have trouble making the
                                                         increased payments, find out if you can refinance to a
Know Your Mortgage
Do you know what kind of mortgage you have? Do you
know whether your payments are going to increase? If                                  Continued on next page.
Continued from previous page.                              Loan modification: You and your loan servicer agree
                                                           to permanently change one or more of the terms of
 fixed-rate loan. Review your contract first, checking     the mortgage contract to make your payments more
 for prepayment penalties. Many ARMs carry                 manageable for you. Modifications can include
 prepayment penalties that force borrowers to come         lowering the interest rate, extending the term of the
 up with thousands of dollars if they decide to            loan, or adding missed payments to the loan balance.
 refinance within the first few years of the loan. If      A loan modification may be necessary if you are
 you’re planning to sell soon after your adjustment,       facing a long-term reduction in your income.
 refinancing may not be worth the cost. But if you’re
 planning to stay in your home for a while, a fixed-rate
 mortgage might be the way to go. Online calculators
 can help you determine your costs and payments.

 If You Are Behind On Your Payments
 If you are having trouble making your payments,
 contact your loan servicer to discuss your options as
 early as you can. Most loan servicers are willing to
 work with customers they believe are acting in good
 faith, and those who call them early on. The longer
 you wait to call, the fewer options you will have.
 After you’ve missed three or four payments and your
 loan is in default, most loan servicers won’t accept a
 partial payment of what you owe. They will start
 foreclosure unless you can come up with the money
 to cover all your missed payments, plus any late fees.

 Avoiding Default and Foreclosure
                                                           Before you ask for forbearance or a loan modification,
 If you have fallen behind on your payments, consider
                                                           be prepared to show that you are making a good-faith
 discussing the following foreclosure prevention
                                                           effort to pay your mortgage. For example, if you can
 options with your loan servicer:
                                                           show that you’ve reduced other expenses, your loan
                                                           servicer may be more likely to negotiate with you.
 Reinstatement: You pay the loan servicer the entire
 past-due amount, plus any late fees or penalties, by a
                                                           Selling your home: Depending on the real estate
 date you both agree to. This option may be
                                                           market in your area, selling your home may provide
 appropriate if your problem paying your mortgage is
                                                           the funds you need to pay off your current mortgage
                                                           debt in full.
 Repayment plan: Your servicer gives you a fixed
                                                         Bankruptcy: Personal bankruptcy generally is
 amount of time to repay the amount you are behind
                                                         considered the debt management option of last resort
 by adding a portion of what is past due to your
                                                         because the results are long-lasting and far-reaching.
 regular payment. This option may be appropriate if
                                                         A bankruptcy stays on your credit report for 10 years,
 you’ve missed only a small number of payments.
                                                         and can make it difficult to obtain credit, buy another
                                                         home, get life insurance, or sometimes, even get a
 Forbearance: Your mortgage payments are reduced or
                                                         job. Still, it is a legal procedure that can offer a fresh
 suspended for a period you and your servicer agree
                                                         start for people who can’t satisfy their debts.
 to. At the end of that time, you resume making your
 regular payments as well as a lump sum payment or
                                                         If you and your loan servicer cannot agree on a
 additional partial payments for a number of months
                                                         repayment plan or other remedy, you may want to
 to bring the loan current. Forbearance may be an
                                                         investigate filing Chapter 13 bankruptcy. If you have a
 option if your income is reduced temporarily (for
                                                         regular income, Chapter 13 may allow you to keep
 example, you are on disability leave from a job, and
                                                         property, like a mortgaged house or car, that you
 you expect to go back to your full time position
                                                         might otherwise lose. In Chapter 13, the court
 shortly). Forbearance isn’t going to help you if you’re
                                                         approves a repayment plan that allows you to use
 in a home you can’t afford.

                                                                                        Continued on next page.

September 2008                                                                                                   2
Continued from previous page.                             Control and Prevention (CDC) says that moderate
                                                          exercise requires some exertion, but not so much that
 your future income toward payment of your debts          you can't carry on a conversation while doing it. A
 during a three-to-five-year period, rather than          moderate pace of walking is 3 to 4.5 miles per hour
 surrender the property. After you have made all the      (mph); vigorous walking is 5 mph or faster. A
 payments under the plan, you receive a discharge of      moderate walking pace uses 3.5 to 7 calories a min;
 certain debts.                                           vigorous walking uses 7 calories per minute.

 To learn more about Chapter 13, visit     Exercise can help you sleep better, improve your
 ust; it’s the website of the U.S. Trustee Program, the   energy level, control your weight, cholesterol and
 organization within the U.S. Department of Justice       blood pressure levels, reduce the risk for heart
 that supervises bankruptcy cases and trustees.           attack, stroke, type 2 diabetes, breast cancer,
                                                          depression, colon cancer, and osteoporosis, and
 If you have a mortgage through the Federal Housing       improve arthritis and back pain, to name a few
 Administration (FHA) or Veterans Administration (VA),    benefits.
 you may have other foreclosure alternatives. Contact
 the FHA ( or VA ( Before you start any new exercise program, however,
 to discuss your options.                              you should check with your health care provider. This
                                                       is especially true if you have a chronic health problem
 For more information:                                 such as heart disease, diabetes, or obesity, or if you           are older than 40 (for a man) or older than 50 (for a
 target=content?sub=10000363                           woman), and plan to exercise vigorously.
                                                       Decide on your fitness goal before you start. Are you
                                                       exercising to improve your fitness or to lose weight? If
                                                       weight loss is your goal, you may need to aim for a
                                                       longer workout than if you want to improve your
                                                       cardiovascular health.

                                                          The American Heart Association developed the
                                                          following chart to show the approximate calories
                                                          spent per hour by a 100-, 150- and 200- pound person
                                                          doing a particular activity.

 Walk Your Way to Better Health
 America on the Move Is in September

 Making exercise a priority is the secret to making it
 happen. If you think about it, you may discover you
 don't have time not to engage in physical activity.
                                                          Set up a walking routine
                                                          Studies show several short walking sessions that total
 A growing body of research has found that a regular
                                                          60 minutes are as beneficial as one longer 60-minute
 program of moderate exercise -- such as walking --
                                                          session. If it's difficult for you to get your walk in all
 may add years to your life. The Centers for Disease
                                                                                        Continued on next page.

September 2008                                                                                                     3
Continued from previous page.                                 quick steps to prevent injury.

 at one time, consider walking 20 minutes in the          •   Land on your heel with each step, roll your foot
 morning, 20 at lunch and 20 after work.                      from heel to toes, then push off with your toes.

 For example, park in the far reaches of a parking lot    •   Pull in your abdominal and buttocks muscles as
 instead of searching for a spot by the door. A brisk,        you walk.
 daily walk with a coworker at lunch could turn out to
 be the part of your workday both of you look forward     •   Walk with your head up, chin level, chest up, and
 to most.                                                     shoulders back.

 Add more appeal                                          •   Drink plenty of water before, during, and after
 Try these offbeat ways to make fitness walking a             you walk.
                                                          •   Check with your doctor before beginning any
 •   Buy a pedometer at a sporting goods store. Aim
                                                              walking routine.
     for 10,000 steps throughout each day -- whether
     at work, home or the grocery store. An analog        For more information:
     pedometer may cost as little as $7; a digital
     device, $20 to $30.                        
 •   Put a dollar in a jar each day you meet your
     walking goal. Spend the money on yourself on the
     last day of the month.

 •   Bring along music that will inspire you along the
     way. There are workout MP3s and CDs that
     include encouraging messages, tips, and posture
     checks throughout your workout. You can make a
     mix of the tunes that get you going to help make
     your workout more enjoyable.

 •   Stop by your local tourist office and pick up
     pamphlets listing historic walking tours, shopping
     malls, local universities, parks, and wildlife
     sanctuaries. You'll discover wonderful places to
     walk in your locality as you improve your health.

 •   Join a walking club; you'll meet other walkers and
     explore some scenic walks. The American
     Volkssport Association has a network of 350 clubs
     nationwide, with annual dues often less than $10.

 Walk this way                                            Why You Should Eat More Fruits and
 The following walking techniques promote a safe and
 fit walking style:                                       Vegetables
 •   Wear comfortable, supportive walking shoes.
                                                          September is Fruits and Veggies – More
                                                          Matters Month
 •   Warm up for five minutes by walking at a slow,
     easy pace. At the end of a brisk walk, cool down     Choices you make each day can affect your risk for
     for five minutes in the same way.                    cancer. The American Cancer Society says that if you
                                                          do not smoke, choosing to eat a healthful diet and to
 •   Avoid overly long strides. Instead, use small,       be physically active are the most important things you

                                                                                       Continued on next page.

September 2008                                                                                                   4
Continued from previous page.
                                                                 •   Top hot or cold cereal with sliced bananas,
 can do to reduce your risk for many types of cancer.                fresh berries, raisins, or other fruit.

 Several studies have found that diets rich in fruits and        •   Top lettuce-leaf salads with generous
 vegetables help prevent cancer. "People with high                   amounts of tomato, cucumber, celery and
 fruit and vegetable intakes have about half the risk of             mushroom slices, onions, beets, radishes,
 cancer as people with low intakes," says Peter                      green peppers, broccoli, shredded carrots,
 Greenwald, M.D., Dr. P .H., director of the National                bean sprouts, or fresh fruit.
 Cancer Institute's (NCI) Division of Cancer Prevention
 and Control in Washington, DC.                                  •   Add chopped green, yellow or red peppers,
                                                                     broccoli, celery, onions, and cherry tomatoes
 "Specifically, the evidence indicates that higher                   to rice and pasta salads.
 intakes of fruits and vegetables are associated with a
 decreased risk of developing esophagus, oral-cavity,
 stomach, colon, rectum, lung, and larynx cancers,"          Desserts with fresh fruit
 Greenwald says. In response, the NCI recommends
 eating five or more servings of fruits, vegetables, and         •   Serve fresh-fruit desserts--poached pears,
 juices every day.                                                   baked apples, or fresh-fruit-topped angel
                                                                     food cake.
 The NCI defines a serving as one medium fruit, 6
 ounces of 100 percent fruit or vegetable juice, 1/2             •   Double the amount of vegetables called for in
 cup cooked or raw vegetables or fruit, one cup of raw               soups, stews, and casseroles.
 leafy vegetables, or 1/4 cup dried fruit. Even eating
 just one extra serving of fruits and vegetables each            •   Once or twice a week, serve a vegetarian
 day can help you avoid a dietary deficit.                           main course such as hearty vegetable soup,
                                                                     meatless chili made with tomatoes and
 Upping your intake                                                  beans, vegetarian burritos, or pasta topped
                                                                     with tomato, herb, and vegetable sauce.
     •   Try to eat at least five servings a day of fruits
         and vegetables, especially those with the               •   To keep your interest high, add one new fruit
         most color, which is an indication of high                  or vegetable to your diet every month. Some
         nutrient content. These tips can help you                   fruits you may not be eating: mangoes,
         increase your intake:                                       papayas, dates, figs, apricots, pineapples,
                                                                     cranberries, and rhubarb. Vegetables that
     •   Have a daily fruit snack.                                   shouldn't be overlooked: winter, acorn, and
                                                                     butternut squash, snow peas, kale, bok choy,
     •   Tuck a banana, apple, orange, some raisins,                 turnip, eggplant, endive, and collard and
         or other dried fruit in your briefcase for a                mustard greens.
         mid-afternoon snack.
                                                                 •   Use your imagination. Top baked potatoes
     •   Use sliced fresh fruit as a topping for                     with shredded carrots instead of shredded
         pancakes, waffles, and fresh yogurt.                        cheese; mix chopped grapes, apples, and
                                                                     raisins into chicken or tuna salad; add grated
     •   Substitute chopped vegetables for some of                   or pureed carrots, zucchini, pumpkin,
         the meat in your recipes. For example: add                  bananas, or berries to muffins and breads.
         carrots, celery, and green and red peppers to
         meatloaf, mushrooms and spinach to lasagna,         For more information:
         and celery, zucchini, and yellow squash to
         spaghetti sauce.                          
     •   Drink a glass of 100 percent fruit juice with
         your meals.

September 2008                                                                                                     5