Throughout the years we’ve seen natural disasters rob from our friends, families and fellow citizens.  We see the physical harm these disasters cause. What we don’t see is the financial after effects that can be even more painful for storm victims.

Here’s a story from The New York Post about the struggles of a Staten Island homeowner after Superstorm Sandy:

“All I needed was a few months of hurricane forbearance to catch up from the $14,000 I’d already paid without reimbursement,” she said. “[But] they reported me in the middle of a federally declared disaster, when my house was in ruins and I was homeless.”  To read more of Allison’s story, click here

Stories like these surfaced in the news and even among friends when the housing bubble busted in 2008.  I would consider the housing bubble a disaster too; maybe not a natural one, but still a disaster.  I went through a situation where I had a house originally worth $290,000 that dropped to less than $240,000.00.  My payments were higher than they should have been, given the huge loss.  I contacted my bank proactively to try and work something out.  I wanted to keep my house but I wasn’t prepared or willing to take a $50,000.00 loss.  So I called and called and did everything I could to get my payments lowered so I could stay in the house.  Their response was “there is nothing we can do until you fall 90-120 days behind.”

Huh? So it was better for me to fall behind, take a hit on my credit and then wait for my bank to come close to foreclosure before helping me? This is the problem with living in a digital society.  There are no decisions based on people anymore.  Everything is based on what a computer says.

Needless to say, I looked at my hand and decided to fold.  I analyzed the big picture and realized that the house and all the bills that came with it, along with its huge loss in value, was just not worth it.  If banks would have taken a more proactive approach to help people, maybe the housing market could have rebounded quicker.  Maybe there wouldn’t have been as many foreclosed and vacant houses out there.

Situations like Allison’s and mine go to show you that at the end of the day, the banks rarely (if ever) take a personal situation into consideration.  It’s about that all-important monthly payment.  So before you purchase, get educated on the bank’s true role in your mortgage — and always be prepared for a disaster.

Posted by:ScoreSense

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