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Homeowners who have recently lost their job are caught in a "no man's land" where they are struggling to make their mortgage payments but can't get help from either their lender or the government.
Peggy Shaw had been thinking about refinancing her Decatur, Georgia condo before she was laid off as a senior editor at a book publishing company last Thanksgiving. She has a $1,295 monthly mortgage payment and says she's barely keeping her head above water.
"I'm scared and I try to take it one day at a time," says Shaw, who is divorced with a son and daughter in college. "When I got laid off, I went to the bank to see if I could get my mortgage refinanced."
But Shaw says she was told that because she did not have a job, she couldn't refinance. The bank told her to keep checking back with them, which she had done.
Shaw isn't alone. More and more homeowners who suddenly lose their jobs are facing the scary realization that they can't pay their mortgage anymore. Many can't get the bank to refinance and they don't qualify for help under the new Obama mortgage rescue plan.
"Unfortunately, there's not much that they can do," says Edward Mermelstein, managing partner of Edward Mermelstein Development, who works with clients in residential and commercial real estate. "If you don't have income and are out of a job, you are very much limited as to what you can propose to the bank for refinancing."
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