Nielsen Law Group

Prevention Is Better Than Cure: How to Cope with Mortgage Repayment Problems

Before any lender could start a court case to repossess a property, it is important that borrowers talk to their lenders first and negotiate an arrangement.


Chandler, AZ -- (SBWIRE) -- 05/22/2014 -- It’s a reality that in this lifetime, mortgages are the most significant investment. The same reason why people in debt who are already on the brink of losing their properties, most of the time, are unwilling to admit that they are already struggling to pay for their mortgages instead of being realistic and seek the help of a legal attorney at the earlier stages of their ordeal.

According to BBC’s reports, there is approximately 40% of homeowners who are having difficulties paying their mortgages out of the 13,659 reported complaints on mortgages and secured loans. Council of Mortgage Lenders released a report that only 138,200 mortgages had arrears of more than 2.5% of the outstanding balance for the first quarter of 2014. This is considered as the lowest performance for the past six years.

The problem with the borrowers, according to the Financial Ombudsman, is that borrowers seek help about their debts on the latter stage rather than ask for debt arrangements before things get worse.

The Root of the Matter

The financial crisis was a huge contributor in this mortgage repayment problem. This current issue on mortgage repayment forced lenders to tighten their rules. A full check on an applicant’s affordability started last month and it has a huge impact into a number of applicants.

In the past, buyers were able to loan for the full amount of their mortgages. Interests are being paid after paying for the loan. But due to the financial crisis, with people losing their jobs and were forced to reduce their work hours, a lot were trapped in negative equity. During the glory days, buyers simply tell their lenders that they can re-pay their debts and that’s it. Now, a lender who can offer an interest rate lower than 4% has to go through the ordeal of deciphering if an applicant can regularly pay the loan if say for example, interest rate would climb to 7%.

Coping Up With Mortgage Repayment Problems

Before any lender could start a court case to repossess a property, it is important that borrowers talk to them first and negotiate an arrangement. Lenders, on the other hand, can come up with a number of creative ways on how to make sure their borrowers are on track with their repayment schedules. In cases that the arrangement to pay the arrears have broken down and another legal action to repossess the property is on its way, the borrower can still try another arrangement with the lender.

Seeking for legal help is the best weapon to combat court actions on mortgage repossession. It is imperative to have a legal representation if the arrangement with the lender about the amount of the arrears is something that is not affordable for the borrower. One should always be eligible to ask for help with legal costs both for advice before any court hearing. Representation at the court hearing if one has a solicitor is very important.

About Nielsen Law Group
At Nielsen Law Group, their mission is simple. Their debt attorneys provide uniquely proactive, practical and personal service to every client. They use a wide range of legal knowledge and services to assist individuals, families and businesses in Arizona and California find resolution to their legal, tax and business issues. Their personal approach and affordable fees have allowed them to build long standing relationships with their clients built on commitment and integrity.