4 Ways To Survive The Credit and Mortgage Crisis

by Stacey Doyle on October 17, 2008

What can we do to survive this credit and mortgage crisis? Plenty.

mortgage crisis, housing options
Photo by The Silver Penny

Did you know that foreclosures were up by 79% in 2007 from the year before? Subprime loans, predatory lending and the housing bubble have all led to a financial crisis of global proportions today. So how can little people like us pull through this major mortgage crisis? Here are a few tips to help get our heads above water during this period:

Tips To Survive The Mortgage Crisis

1. Pay The Mortgage Off First

Let’s start with prioritizing how we pay our bills. Here’s the order in which I pay my bills:

  1. Monthly mortgage first!
  2. Groceries, electricity, heat and primary utilities
  3. Phones, cable and internet, and less important utilities
  4. Insurance premiums — they need to be up to date to protect our assets
  5. Car loan and credit cards

While some bills may remain unpaid causing a major impact on your credit rating, losing your home is the ultimate problem and should be your biggest concern. Remember that paying the mortgage on time keeps a roof over your head so it should always be a top priority.

2. Cut Costs And Tighten Your Belt

Now is not the time to purchase designer handbags, new cars or go on that luxury vacation unless you are completely financially secure. Historically speaking, the economy is likely to get worse before it gets better, so it’s best to stay financially conservative and save the money we have by putting away our credit cards (at least, for the time being). Some suggestions? Rent movies and cook dinner at home instead of going out on Friday nights. Try to focus on covering your basic expenses and maintaining the best possible credit rating.

3. Talk To Your Mortgage Company

With so many problem mortgages to contend with, the last thing your mortgage company would like to handle is yet another foreclosure. Often, you can work out a viable arrangement with your lender by simply approaching them about your situation. Some options that your mortgage company may offer include extending the life of your loan, lowering your loan interest rates and even waiving a few mortgage payments. By taking control of the problem early, you can avoid destroying your credit rating with a possible foreclosure.

4. Report Predatory Lending

If you are the victim of predatory lending, you’re not alone. Here’s my own story of how I had the misfortune of encountering predatory lending up close and personal:

When my husband became seriously ill, we tried to refinance our mortgage as a way to rework our debt and get rid of our credit cards. But most of our credit card debt could not be alleviated by our refinancing efforts, and so unfortunately, we continue to struggle to pay off all our debt. Recognizing that refinancing didn’t get us anywhere, I called the mortgage company and threatened to report them for predatory lending. They issued a reimbursement check for a portion of our incurred closing costs to avoid additional action. It was nothing more than pure consolation for us.

So for those of you who may find yourselves in a similar situation or feel that you’ve become victims of predatory lending, you can visit this helpful site for more information about filing a formal complaint.

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{ 2 comments… read them below or add one }

1 MC October 17, 2008 at 1:30 pm

Great tips! Finding the right mortgage company is so stressful. It’s good to have tips on what to look for while shopping.

2 Mary@SimplyForties November 16, 2008 at 1:04 pm

Talking to any of your creditors when you anticipate a problem is always such good advice. They certainly tend to be a lot more open if you call before you are months late on your payments.

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