Federal Reserve Board study shows Texans need help understand ARM and other loan Terms

A Federal Reserve Board study shows Texans may sign loan terms without understanding all the interest rates or dangers if they default. Texans may not realize they have more options than letting a mortgage lender foreclose on their house.

AUSTIN – In Texas, borrowers do not have much time to fight for their homes. A typical foreclosure takes roughly 44 days. This does not count the time needed to mail a mortgage payment delinquency notice and a foreclosure auction notice. Unlike other states, Texans do not get a second chance to save their home once it is sold at a foreclosure auction. This is why Texans need to know all their options in the fight to save their home. Organizations, such as Save My Texas Home can help borrowers find all the options available and decide the best course of action.

Job loss, a medical emergency, a death in the family, large debts, a major home maintenance expense, and not being able to pay the adjustable rate as the mortgage loan payment increases are reasons why homeowners may think they are forced into foreclosure. Borrowers do not need to let these circumstances get them down.

Specialists at a non-profit organization, such as Save My Texas Home, can help Texans decide how to save their Texas home and avoid foreclosure. Foreclosure is not the only option for couples who have stopped making the mortgage payments. A survey by the Consumer Federation of America found minority and lower-wage earners were likely to prefer ARM mortgages, but they did not know the risks.

A 2001 study sponsored by the Federal Reserve Board found 35 percent of borrowers did not know the how much the per-period cap is on adjustable interest rates. Another 20 percent did not know their interest rate when they first took out a loan.

Most Austin borrowers are learning that they will not get a mortgage loan if the percentage of the value to loan ratio is high. Unlike other products, mortgage loan borrowers may have a hard time switching to another loan product, if the value of their home does drop.

Texas allows a non-judicial sale of foreclosures, meaning those who have houses in foreclosure do not have to have a judge’s signature in order for a mortgage holder to sell their property. Since Texas is a “power of sale” state, foreclosures can be processed more quickly and be a simple and cheaper process for the Lone Star state.

What happens if you need help to save your Texas home? Save My Texas Home can help you look at all the alternatives and help you connect with specialists for government programs, which will save your house. The organization also can explore what options you may have if you need to seek charitable or not-for-profit solutions to solve financial problems and pay off a mortgage loan.

Do you need help finding the right resources, Save My Texas Home can help. To speak with a specialist about your specific needs, call 512-271-5044 or visit savemytexashome.org.

Leave a Reply

Your email address will not be published. Required fields are marked *