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Many borrowers unaware of mortgage help programs

January 31, 2011 - Mortgage borrowers in Nevada are walking away from their home loans, even though programs exist that could help them mediate their mortgage problems and aid in their relocation to a new, more affordable home.

According to the "Faces of Foreclosure" report from the Nevada Association of Realtors, 23 percent of borrowers who lost their home to foreclosure admitted to strategically defaulting on their home loan. A strategic default is when a mortgage borrowers knowingly "walks away" from the home loan even if they have the financial wherewithal to keep up payments. Experts said strategic defaults have become a socially acceptable practice despite their crippling effect on credit scores and the fact that many programs exist that could help borrowers avoid that fate.

"This report suggests that we can do more to make distressed homeowners aware of the free and low-cost resources available to help them," said NVAR president Linda Rheinberger.

Sixty-one percent of respondents added they were not aware of the federal Home Affordable Foreclosure Alternative initiative or other state programs that help borrowers avoid foreclosure.

HAFA provides counseling and aid to distressed borrowers, helping some correct their mortgage problems while assisting others by selling their current properties via short sale and moving them to more affordable housing.
 

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