Hurricane Katrina - Litton Loans |
|
In the wake of Hurricane Katrina, a very nasty crisis is shaping in New Orleans: the plight of thousands of homeowners who will need to pay their mortgages. Litton Loan Servicing is one of the many lenders who hold mortgage liens in the Katrina zones. Six months after the hurricane, they were still locating some borrowers and assessing the condition of homes ? or the existence of them, in some cases.
Like most loan servicing companies, Litton Loans is not interested in foreclosing on properties in the area. What, loan companies are asking, are they going to do with these homes? Sell them in the condition they're in, at a great loss? Unlikely, even if they could. Some loan companies are trying to provide loan reprieves to the hardest-hit customers, but only in cases where the homeowner has no insurance (or no applicable insurance, in the case of the flood fights) and where the homes are uninhabitable. The problem is, most of these loans will come due in a balloon payment at some point ? that means that those who owe the mortgages will have to make a huge payment in the amount of all those payments, all at once. For some, this may be doable, though painful, through insurance payments; for many, the spectre of ruined credit on top of all the losses they have experienced already looms. Even worse, there has never been a disaster on the scale of Katrina in the United States; everyone is in uncharted territory, from mortgage borrowers to government agencies to the banks to regulatory agencies. Insurance is in chaos. And no one is doing exactly the same thing with the same situation. Litton Loans in particular is pretty reasonable about helping you restructure your loans so that you can pay them in times of catastrophe, but there have been reports of Litton being less than reasonable lately. This is probably because so very many of their loans are in the hard-hit Gulf Coast region. It's a matter of survival to them right now to have some cash-flow income on mortgages, so they are probably being a little harder on homeowners than they normally would. |
|
Borrowers who are having trouble paying their mortgages on Katrina-affected properties need to do the following:
? Contact lenders as soon as possible to arrange alternate payment plans. Lenders do not want to foreclose on these homes; they would much rather have their money. In many cases, lenders have been spreading out the reprieved payments over several months, or extending deadlines for repayment, particularly for jobless and displaced victims. And if you need further extensions, contact lenders. Do not expect them to automatically grant you extensions. ? Check credit reports on a regular basis. Lenders may be reporting negative items to the credit bureaus even though they have agreed not to do so. This is not out of maliciousness, but rather simply due to the confusion that is affecting everyone involved in Katrina. ? Make no assumptions, and get all agreements in writing. ? If you do get an insurance settlement, do what you can right away to pay back overdue mortgage payments. The sooner you get things squared away, the less likely you'll find yourself in trouble when things settle. ? Pay attention to what's happening to Fannie Mae and Freddie Mac in the news. These two mortgage investment companies own or back most U.S. mortgages, and what they do with Katrina loans is going to matter across the industry. Most of all, borrowers should remember that things will eventually get better. Though times look dark right now, they won't be forever. |
Readers Comments
Add Your Comments
 Conserned Consumer (30/06/2007) |
| Have you seen the many, many, many, consistent complaints against you posted on the Consumer Affairs website from places like Ohio, Baltimore, California-far from gulf regions. If these accusations are true, watch out-the poor have a POWERFUL ATTORNEY-GOD! Although it may not seem so, HE sits high and sees all and we will all give an account of what we do to people. |
 |
| Site Map Glossary of Terms Useful Resources יום הולדת Loose Diamonds |
5/13/2008 4:52:56 |