Adjustable-Rate Florida Mortgage Problems? Call Your Lender to Negotiate

The day of reckoning is near for millions of Americans - many of them in Florida - who financed their property via adjustable-rate mortgages.

Their mortgage rates are already resetting higher, and in some cases, payments so small in 2004-2005 are now pushing homeowners to their limit… or beyond.

What is a borrower to do? You can try to make ends meet by cutting back on expenses like premium cable channels and going out to eat. Hey, every little bit helps when it comes to your mortgage payments.

But don’t despair. There is another, much more simple way to look at this problem: You, the borrower, are not powerless.

“Consumers get the feeling it is a lost cause to do anything, but it is pretty much the opposite,” Harry H. Dinham, president of the National Association of Mortgage Brokers, said.

“The most motivated people are the lenders.”

Homeowners should seek a lower rate or switch to an interest-only mortgage for a spell. They might even ask for more time to pay, just as long as it does not create negative amortization, or letting the debt increase.

The biggest mistake a Florida mortgage holder can make is the act of dodging the loan officer when trouble arises.

Know this: Your Florida mortgage lender does not want to get stuck with your property. They really don’t. They have to maintain it, list it, sell it on the open market and probably take a loss.

Some analysts say that it costs a bank an average of $40,000 to foreclose on a Florida home loan. That amount gives the borrower room to negotiate - if they’re smart enough to swallow their pride.

Christopher Cagan, director of research at First American CoreLogic, a mortgage research firm in Santa Ana, Calif., has studied databases with information on 58 million mortgages and sees a wave of mortgage resets moving through the system between now and 2010.

First, it will be mortgages with low teaser rates, followed by subprime loans and finally, the loans to homeowners with good credit.

This transition is not enough to hurt the overall economy - about $112 billion will be lost, he estimates - but it is a world of pain for the households and the people left holding the Florida mortgage.

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