Housing counselors are not psychologists, but according to Joaquin Benitez author of “The Foreclosure Phenomenon: How to Defend Your Home from an Impending Foreclosure,” who personally experienced foreclosure, empathy and awareness can make a huge difference.
“Negative emotions can be the biggest roadblock to defending against impending foreclosure,” he said, even for homeowners who find value in credit counseling.
It may seem like lenders and servicers cannot do much to assist borrowers overcome the emotional trauma of foreclosure, but whether they like it or not homeowners’ presumptions and emotions affect the foreclosure process and foreclosure management.
Credit counselors and financial advisors can help borrowers prevent foreclosure and understand the various ways they can survive a housing ordeal, only if a homeowner manages to take control of negative emotions.
In a foreclosure situation the emotions that overtake many borrowers can be critical in how and if they survive the trauma and may prevent them from looking for alternatives to their impending foreclosure, including short sales or foreclosure-to-rent solutions.
Borrower’s emotions play a vital role in how they deal with life's ups and downs, Benitez said, and if they are in peril of losing their home to foreclosure, they will probably experience a great deal of anger, fear, anxiety and shame.
The challenge is to at least be sympathetic of their need to overcome these emotions, including guilt and blame.
“Many years ago, a corporate lawyer told me that in his personal and professional experience, someone who loses his temper is usually very afraid,” Benitez writes.
His advice to borrowers (and by default counselors) is, “before you explode in anger, stop for a moment and consider what is making you afraid. If you can figure out what is making you afraid and you deal with that fear, your anger will go away.”
Fear is defined as “a distressing emotion aroused by impending danger, evil, pain, etc., whether the threat is real or imagined,” he notes, it derives from worrying about their bad financial situation.
Hence, once letters from lenders, servicers and other creditors demanding payment start to come in fear turns into a dominating emotion that leads to anxiety and oftentimes depression. These borrowers need assistance in dealing with that fear by learning about potential solutions that will help them release feelings of anxiety. By focusing their “conscious attention on the solutions” they can move out of the negative vibration and into a positive vibration and work with lenders to find a solution.
Most importantly, he notes, “Whenever we experience a negative event in our lives, by nature we try to find someone to blame,” which never helps to solve the problem, even in the cases when blame is fully justified.
The risk is that borrowers spend all of their time playing the blame game, while “the foreclosure clock is ticking,” he adds. Unless together with the foreclosure counselor they take timely countermeasures they end up losing their home to foreclosure.
Guilt and blame are closely related as they entail resentment directed at someone else while guilt is anger directed at oneself, he wrote, so the best way to avoid such is to “quickly discard them and start to consider solutions instead.”
Often shame prevents borrowers from reaching out to counselors, friends or family members who can assist them until it may be too late.
Finally, since distressed borrowers do know who they can trust in their close circle, helping them include foreclosure counselors and their mortgage servicer into that short list is a challenge banks appear to continue to struggle with today.