. Because the FHA-backed refinancing program is voluntary, some loan servicers may be reluctant to participate. Homeowners wishing to refinance their current mortgage should continue making their regularly scheduled mortgage payments, if possible. If a homeowner's financial situation deteriorates enough, the bank or loan servicer will not want to work with them. To prepare for this transition, experts recommend that consumers talk to a local credit counselor and track their expenses and incomes closely to better forecast their cash flow for the next six months. This will allow loan servicers to make a better decision on whether or not to refinance the existing mortgage.
. Although foreclosures are increasing, defaults, which are the first phase in the foreclosure process, rose by only 6.6 percent in California between the first and second quarter. This could indicate that foreclosures are nearing a plateau and that defaults on subprime mortgages are nearing a peak. Some experts believe it could also mean that lenders are overburdened and do not have time to process the paperwork required to start foreclosure proceedings.
Source C.A.R. July 31st 2008
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