AHP Modifies Loan For Homeowner Struggling With Skyrocketing Payments

Published on July 14th, 2014 by AHP Administrator

Eric’s Ohio home.

Purchasing homes and taking on mortgages are serious life decisions. A mortgage is not like the pair of shoes that blister your feet when you get home or the television that doesn’t fit your entertainment center. The mortgage cannot be returned to the store in exchange for a better-fitting one and plays a significant role in shaping your financial future.

Investopedia.com reports that one of the most common mistakes people make in purchasing homes is choosing an adjustable-rate mortgage (ARM) when it does not suit their situation. ARMs can make sense for homeowners who plan to sell within a short timeframe or for real estate investors who plan to put the money saved on interest elsewhere in their project.     However, during the housing bubble, lenders were offering ARMs to many people who would not be able to sustain the increased payments when the interest shot up.

The same report states that from 2007-2009, 8 out of 10 homeowners were trying to refinance their mortgages. When one of AHP’s homeowners, Eric, decided to refinance into an adjustable-rate mortgage on his Ohio home in 2005, he didn’t realize what he was getting himself into.

Eric moved into his father’s home after his death 12 years ago. He was 22-years-old when he moved into the home, and three years later, he decided to refinance the mortgage. “It was a bad deal, they got me on an adjustable rate,” Eric said. “I was young– I didn’t know what I was doing. I wanted to keep it, but when the payments started going up, I couldn’t afford them.”

Eric tried to modify the loan with his lender when the payments became unmanageable, but said the lender had no interest in working with him. He received notices of foreclosure, but discovered his loan had been sold and went years without hearing from a lender.

“After so long, you don’t know what to do because there’s nobody to talk to, there’s nobody to call because you don’t know who has it,” Eric said. “You can’t afford to get caught back up—there’s no way. So you’re kind of lost in the shuffle”

The next lender that Eric came in contact with was AHP. Eric was still facing foreclosure and was initially skeptical of the offers AHP has presented to him. “When I got a hold of you all it was kind of a relief because I felt like I could kind of get back in there and make things right again,” Eric said.

AHP was able to settle Eric’s several years of delinquent payments for $2,000 and lower his monthly payments from $481.37 to $340. Additionally, Eric now has the option to settle his previous unpaid principal balance of $57,261.22 for $32,300. He will also not have to worry about his interest rate skyrocketing or his monthly payments increasing, as they will remain fixed for the life of the loan with AHP.

Eric now shares his father’s old home with his wife and two children and works at a nearby Wal-Mart. He is grateful for the assistance of AHP in providing him a modification, which has reduced his stress level and will allow him to get back on track with his monthly payments. “You guys have been great. I can’t thank you enough for working with me as much as you have.”

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