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REALTOR®: Advice and help line available for homeowners who might be falling behind on payments

Wednesday, April 4, 2007

Current market problems and reforms in the underwriting and pricing of subprime loans, including the tightening of underwriting standards by regulators, will have a short-term impact on housing markets, the National Association of Realtors® (NAR) said last week.

David Lereah, NAR Senior Vice President and Chief Economist, predicted that tighter underwriting practices may cause total home sales to fall by about 100,000 to 250,000 nationally, or no more than 3 percent a year over the next two years.

In a commentary distributed to NAR members, Lereah stated, "Foreclosures are increasing inventories in certain local markets. The projected flood of foreclosures are problematic and will add to the already loose housing supply in some local markets, but these local markets are exhibiting healthy economic activity, enabling them to be able to absorb increases in foreclosures."

Those prospective buyers who cannot purchase a home because of tightening standards will probably, over time, purchase a home when they have attained the financial capacity to do so by saving for a down payment or growing their income.

Realtors, as the first point of contact in the real estate transaction, are uniquely positioned to inform and guide consumers through the maze of financing alternatives to make sure a home buyer's mortgage meets his or her financial needs. Members of the Silicon Valley Association of Realtors® (SILVAR) advise homeowners who feel they might be falling behind on payments to follow recommendations suggested by the Homeownership Preservation Foundation to prevent foreclosure:

1. Take action immediately. Doing nothing will only make a bad situation worse. If you are going to be late with a mortgage payment, contact your mortgage company right away. Your mortgage company may be able to refinance the debt, arrange a repayment plan or modify the loan by adjusting the interest rate or extending the terms to make it more affordable.

2. Call the Homeownership Preservation Foundation at 888-995-HOPE to speak to a counselor about your financial situation. Financial counselors help homeowners, free of charge, to address their financial situation and understand their options.

3. Organize your bills and debt, and prioritize your expenses. Contact your credit cards and utility companies and make them aware of your financial crisis. Your credit card company may be able to reduce the interest rates on your cards, and utility companies often have special programs based upon income for families facing life-changing events.

4. Prioritize expenses and pay the ones that are most necessary for the well-being of you and your family, such as shelter, food, and utilities.

5. Make every attempt to protect your credit score because companies refer to it when they evaluate your ability to qualify for loans or other financial products. Making late payments or skipping them can seriously affect your credit score.

6. Beware of predatory lenders, pre-approved loan offers, phony counseling agencies and similar scams. The U.S Department of Housing and Urban Development has more information about avoiding predatory lending on their website, www.hud.gov.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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