9 February 2008 - Realtors build communities in part by expanding homeownership opportunities and getting people into homes of their own. Those are noble goals, but helping homeowners stay in their homes is also important to sustain those communities.

Over the past few years, lenders invented new types of mortgages to help families buy their first home and refinance their existing mortgage. Many of those mortgages helped families without cash for a down payment, or with less-than-perfect credit, qualify for loans known as "subprime" loans.

Subprime loans have a higher interest rate and higher costs, such as prepayment penalties. In recent years, a very popular, widely available mortgage product was the hybrid adjustable-rate mortgage (ARM). Hybrid ARMs have an initial period with a lower interest rate ("teaser rate") followed by significant increases over the remainder of the loan.

Now that those teaser rates are expiring, a growing number of borrowers with hybrid ARMs and other nontraditional forms of loans are seeing monthly payments jump beyond their means. With overall credit markets tightening, refinancing can be difficult, but the Utah Association of Realtors wants you to know there is hope.

When monthly payments become too much, the first thing to do is to speak up. You need to seek the help of professionals, whether they are financial counselors, often available through local nonprofit counseling centers, or your lender.

While many people believe that telling a lender about financial difficulties will only hasten a move to foreclosure, borrowers should remember that lenders do not like to foreclose on mortgages. Taking possession of your house, maintaining it and then attempting to sell it will nearly always be a losing financial proposition for your bank. Therefore, talk with your lender sooner rather than later to try to arrange new repayment terms.

Realtors can provide assistance to troubled borrowers by explaining sources of help and referring you to various counseling resources in your area. If your lender is not willing to restructure your loan, most Realtors can refer you to other responsible lenders in your area. Some elderly borrowers have even found solutions to their mortgage difficulties through reverse mortgages and other creative, but responsible, tools.

Above all, beware of consumer scams often advertised as "We Buy Houses for Cash," or similar slogans that sound too good to be true.

Project HOPE NOW is a voluntary alliance of major lenders who have agreed in principle to assist qualified homeowners who are on the verge of default due to resetting adjustable-rate mortgages. The national toll free number is 888-995-HOPE to reach a counselor for advice and further referral.

The National Association of Realtors' Web site also has several important consumer brochures that can be downloaded free of charge. In addition to information specifically aimed at borrowers facing trouble in making repayments, other brochures offer advice on avoiding predatory loans and obtaining traditional mortgages. All the brochures are available at www.REALTOR.org/subprime.

The worst thing you can do if you're having trouble making your monthly mortgage payment is to remain silent. Help may be available; you just have to ask for it.