How Foreclosure Has Affected Families in Michigan

Facing foreclosure can seem overwhelming, especially when you are being given so many pieces of advice. Being pro-active and knowing the right facts is the best way to save your home.

Unfortunately, there are scam artists and high-risk mortgage lenders taking advantage of desperate families in their times of need. Careless financial mistakes and mishaps can lead to devastation.

With the economy is reeking havoc on working families, Americans need to be more aware than ever with how and what they spend their money on. If you are faced with an adjustable rate mortgage or have lost your job and have fallen behind on payments, doing nothing is the worst thing you can do.

Falling for a mortgage restructure plan that seems too good to be true is easy to do -- especially if you are looking for a quick-fix to getting your home out of the foreclosure danger zone.

Here is a real-life example of a hard working couple fell prey to a home mortgage scam:

Lorie and Steve are a married, middle-class couple that have felt the true effect of the sub-prime mortgage crisis.

The couple bought a four bedroom family home in Grand Blanc, Michigan -- an upper middle-class community just south of Flint, Michigan. They put 10 percent down on their new $145,500 mortgage and financed the remaining balance. The mortgage was considered high-risk by their lender because they were first-time home buyers. An adjustable rate mortgage made their house payment affordable initially, but over the course of the next two years, the house payment kept going up. Before they knew it, their money in savings was gone because they were using it to meet their monthly mortgage needs.

Before long, the house payment was too much to pay and to make matters worse, Steve lost his job. He did find more work, but not until two months later -- by that time, the bills had piled up, including the house payment.

This time they were in foreclosure status, and they were desperate. The first place they turned to was the bank who financed the mortgage on their home. The bank was reluctant to help with payment arrangements, because they had fallen behind on all their revolving credit and their credit score was very low. Lorie responded to an ad in the phone book for a mortgage company that helped people with bad credit. After meeting with the new mortgage company, Lorie and Steve were very excited that they would finally be able to keep their home. The only drawback was the very high interest rate and of course, a $1000 non-refundable fee that they had to come up with. The company explained they could secure their home over the phone if an immediate payment was made. They decided not to pay the utilities and car payments that month and go ahead and pay the hefty fee, so they could save their home.

The next day when they showed up to sign the loan paperwork, they noticed no one was there. They both knew that the appointment time was at 10 AM. They waited two hours, but still the broker never showed up. They went home and came back the next day and even tried calling, but the number had been disconnected. At this point, they knew they had been scammed!

Lorie resorted to calling the local news station and was able to get a news reporter involved. After a thorough investigation, they found out the broker was a scam artist and scammed several homeowners out of thousands of dollars in the surrounding area.

Upset and facing foreclosure, they had no alternatives. All other banks and businesses had turned them down and they had no choice but to wait to be kicked out of their own home.

When the day finally came, a police officer served them papers and told them they had 72 hours to vacate the premises. They sold most of their things and moved out. They found a little apartment on the bad side of town in which they chose to move into.

Times are still rough for Lorie and her family. They struggle to make ends meet and have even visited the local church food pantry to keep the family fed.

Foreclosure has a ripple effect on people and a leaves a lasting stamp on poverty and despair to everyone involved. It's bad enough to deal with the loss of income coming in and then to lose your home. Pay extra caution to businesses trying to take advantage of you if you are in foreclosure. Err on the side of caution and check the business out with your local better business bureau before signing any paperwork or sending money.