[lookout123]

Those who don't pay their bills have always gotten the sweet deal. Lenders when faced with receiving $0 or 50-80% of what the contract entitles them to will always choose the option that gives them at least something. It isn't just your mortgage either.

If you owe $5000 at 9% and you make your payments every month right on time, try calling the company and ask them if you can get a break on the rate. The answer will be no. Miss a payment and your rate will jump to somewhere around 24%. If you call and ask them to return you to your old rate and you'll get laughed at.

Now skip your payments for 7 months. You will have compounded 24% interest on that $5000 + late payments every month. BUT if you call that company and explain you can't afford to pay that, most of them will offer to wave all late charges, drop your rate down to 5-6%, and bring your account current if you can make some sort of a payment today and agree to make your payments from that point on.

If that doesn't seem like a good enough deal don't pay them for 13 months. By that time they will have sold the paper to an agency at a discount. Talk to the agency and offer to pay the account in full - for a discount. They will offer you somewhere in the area of 30-40% discount just to get something out of you. The longer you wait, the lower it goes.

So if we go back to the start, you used $5000 of someone else's money. You can make all the payments and maintain a positive credit score, probably paying well over $7000 to pay it off, by the time it is all paid off. Or you can sacrifice a few points on your credit score and pay them $2-3000 in a year or so. That's the way the cookie crumbles.

The point is the lenders aren't "helping" the borrowers, they are trying to salvage their own finances by preventing the mortgages from going into default, which effects the lender's own credit rating and ability to conduct business. Poor, poor business decisions over the last 6 years forced this issue.