It’s the letter you hope you never get --a notice of default from the bank. But more than 1,000 people in San Diego received one in their mailbox last month.
Smith: The number one thing they can do is open your mail. Open your mail, contact your lender.
Ed Smith has been a mortgage broker for 24 years. He sees too many people avoid the bank because they’re embarrassed. He says that’s the wrong thing to do.
Smith: Lenders do not want your home. Lenders want to work with you. They’re under financial constraints also. They have to make sound prudent judgments on how they can work with people. People have to put up their finances, they have to completely disclose their financial positions so a lender can make an accurate decision on how can we structure something to help this person stay in their home.
According to Dataquick Information Systems, the average number of default notices sent to San Diego homewoners in the past 15 years is just over 2,100 every three months.
In 1996, a recession year, more than 5,000 were sent in the same time period. And now, in the most recent quarter, the number of notices is well above 2300. So we’re already above average. And experts say those numbers are growing at an alarming rate.
Smith: This is the fallout of that skyrocketing appreciation and people getting into the buying frenzy. It’s market driven.
The future doesn’t look much brighter. Across the country, $1 trillion worth of adjustable rate mortgages will come due in the next 18 months. That means even bigger mortgage payments for many people.
Smith: If you look down the train tracks and you see you this little glow and it's not a candle, it’s connected to a train and it's coming at you and you need to do something about that.
If you are a homeowner behind in your payments, there are people you can contact, first, there is the California Association of Mortgage Brokers which has information packets on how to stop your home from going into foreclosure, and there is also the San Diego Home Loan Counseling and Education Center, a non-profit group.
