Banks are really like some people. They are so enamored with their own image as paragons of lending prudence but this present crisis belied all that. It exposed most banks, especially the big ones, for what they really are. Nothing really decent in them except like the greedy Shylock out to extract a pound of flesh (the central character in Shakespeare’s The Merchant of Venice).
If you are like most people who are barely keeping their head out of the water, then do not panic or do something desperately stupid. You may have missed a few monthly payments on your car loan and the vehicle is now in danger of being repossessed. That is okay as the car is already rundown. Your credit cards are dangerously close to being canceled because they had been maxed out and you can no longer afford to make the regular repayments. That is still okay with you. Cancel them all if they want.
There are many things you can endure with a straight face and you can still grin and bear it all. But what if the bank is now sending you registered mail letters threatening foreclosure of your house? Well, that is certainly something you cannot take lying down. This is something else more serious. Are they really threatening to throw you out of your own precious home? They must be joking, right? You can put up with other financial difficulties but not this one this time. This really hurts where it hurts the most. Your house is not just any piece of property. It is your home.
This is the place where you had your most memorable moments. The place you acquired after your marriage and where you settled down after the honeymoon. This is the place where your kids first learned to take their first tentative steps. This place holds wonderful memories treasured for a lifetime. More than providing a physical shelter from the elements, this is where your dreams first came about. Now, they are trying to get their hands on this property. This cannot be happening; it is a nightmare!
When faced with this situation, then you are not entirely alone. The housing crisis has put many people out of their homes and deprived them of their last shreds of decency. It took away their dreams. But you can avoid the same fate by doing something that is rarely resorted to by other people. You can visit your bank and ask for more lenient terms this time around than what they imposed when they had approved your housing loan.
Your bank is more than willing to listen to you. They might be eager to cut a deal with you if are sensible enough to approach them. The crisis has forced them to deal with people just like you who are anxious to keep their homes. The bank is anxious not to go with a threatened foreclosure as it will just pile more bad assets on their books. Let them know you have difficulties in keeping up payments for some reason due to the financial crisis which they created in the first place. They will gladly reduce your payments to keep your mortgage account current and this is called loan modification. This is your one chance to save your home and it may not come again in your lifetime.