There’s been a major boom in real estate during the last decade, and homeowners and investors alike are finally realizing that the ride’s over for the time being. The double-digit gains they saw on their property values have outright disappeared and in some markets prices are decreasing back to some more reasonable levels. During the big real estate shoot-up, just about everyone wanted to get into a home whether they could afford it or not.

In order to buy real estate, many consumers and investors used all sorts of creative financing which simply did not exist a decade or two ago. Consumers used all sorts of exotic mortgages to make their payment look lower than it should have been in reality. Some extended the terms of their loans to 50 years. Others took out mortgages where they paid a variable rate or only paid the interest on the loan and none of the principal. They were banking that home values would continue to spike up and somehow everything would work out, unfortunately that wasn’t the case.

Eventually the real estate market became over inflated and starter homes were out of the price range of first time home-buyers. The demand dried up as worries increased that real estate prices might decrease in the coming years, and home-owners wanting to sell are often stuck in their properties. Others are now realizing that they simply cannot afford their home, missing payments and avoiding foreclosure.

In fact, so many consumers are facing foreclosure that the second largest mortgage lender in the country, Wells Fargo, is looking to arrange workout plans with homeowners who can’t make their monthly mortgage payments. The reason for this is that there’s simply an overwhelming number of homeowners that are behind on their mortgages. It’s infeasible for Well Fargo to foreclose on all of these homes, so they’re looking for an alternative plan. The best candidates for their plan are homeowners who got behind but now can pay their mortgage payments again.

If your mortgage was sold, you’ll have to pay particularly close attention to your mortgage documentation if you want to do a workout plan. Many mortgage contracts have stipulations that no changes can be made to the loan terms after the mortgage was sold. If this is the case, you’ll need to get a waiver from your current loan holder (if you can find them) to get the benefits of the workout plans being offered by Wells Fargo.

Get stuck in the sub-prime mortgage crisis? We are the leader in mortgages, providing information on the latest mortgage rates and our site houses one of the largest directory of mortgage brokers around!