A tearful Amber reached out saying her bank has been sending her letters threatening a Power of Sale (known as foreclosure in the US) of her family’s home. Her husband lost his job about 11 months previous and they were struggling under her single income and his benefits to support her family with two teenaged sons. The couple had not told the kids of their financial struggles and the bills continued to pile up and her husband’s chances of replacing his $70,000/year salary in marketing looked grim.
The couple had exhausted what little savings they had and made the unfortunate decision to skip their mortgage payments, feeling that it was a better decision than paying their other debts. This was actually a bad, uninformed decision and immediately their credit ratings dropped and the bank began issuing warning letters.
By the time Amber contacted me they were almost 90 days in arrears and the fees and penalties were stacking up daily. Once a lender begins Power of Sale proceedings, the amount owed can increase dramatically. Each letter the couple received came with a $250 fee plus dozens of smaller amounts that amounted to nearly $14,000 on top of their $312,000 mortgage balance.
Working with their bank who found out I was now involved, we were able to secure an emergency equity loan from an alternative lender within days. Since the mortgage was currently in arrears and the couple’s credit scores dropped significantly we needed flexible options. Fortunately the home was worth nearly $650,000 we secured a $65,000 loan that paid out the arrears penalties, gave the couple enough funds on hand to cover their mortgage payments for the rest of the year and pay out some credit cards.
Once we prevented the legal action and brought the mortgage up into good standing, I worked with the couple to build a plan to get their credit scores back up and restructure all their debts. Nearly two years later I continue to provide free advice and support to ensure this temporary blip remains a learning experience.
If you are at risk of missing a mortgage payment or have fallen in arrears, I strongly encourage you to reach out to me for advice as soon as possible. Your fees and penalties will begin to accrue very quickly and we need to take action to fix the situation.
By law I’m not permitted to charge you a fee for mortgage and financial advice and I’m only paid when I’m able to help you.