Mortgage Relief and There are Options!
What if you owe more than your house is even worth? This is called being Up-Side Down or Underwater. There are many homeowners in this situation and you’re not alone. In today’s market of plummeted values, economic challenges and credit rejection, everyday more and more people are thinking the same thing as you: “What should I do?”
There are a couple different types of people out there currently.
- The person who just flat out can’t afford the payment anymore due to layoff, divorce, adjusted interest rate and higher payment, unexpected debt, illness, etc…
- The person who can afford to make the payment, but decides not to because they owe more than their house is worth and are Underwater. They are feeling like they are throwing good money at a bad situation.
No matter which category you fall into, you have some options. We all have different reasons for falling on hard times and they not only affect you, but many others as well. We feel it is important to understand your options and to work with California Market Specialists, like ourselves, who can provide you the information you need to make the best decision. A good decision that takes into account your credit future.
If you are in the first category of not being able to afford your payments anymore, there are a few things to try. Some of them may work and some may not, but you will need to try all of them to better your situation.
- One option is to try and make your payment afford you. This has been under the radar to the average person and can be of significant help to someone in trouble. What does this involve? Well you would have to get the bank to make your home affordable. We know this is a difficult task, but there are some banks that are helping. This would be through a Loan Modification. This would entail the bank negotiating with you to lower your interest rate, extend your ARM, convert your adjustable to a fix rate, lower your payment, work out a payment plan, or in some very rare cases reduce the principle balance. Sounds great doesn’t it? Well, sounds great, but may be very difficult to obtain. The questions, forms, and all the documentation can be overwhelming. It appears that the number of homeowners obtain loan modifications is becoming less and less. Mostly, these temporary loan modifications are just temporary bandaids to a hemorrhaging problem! Far too many people have been victims to so called Loan Modification Specialists, who have done nothing but taken their money and YES even attorneys. There are always those out there who will try to capitalize on someone’s vulnerability…be careful!
- The other option is to Short Sale your home. You would need to receive a fair market value offer for your home and submit this offer with a perfect Short Sale Package to your Lender(s) for approval. A successful Short Sale requires expertise, experience and the ability to obtain a quick quality offer on your property.
If you are asking why would any bank approve a Short Sale? The answer is that it can cost tens of thousands of dollars may be more for the bank to foreclose. They want to avoid this at all costs, even if they don’t seem to want to cooperate. What is ridiculous in our opinion, is that some banks (not all) won’t speak with you until you have missed a payment. In dealing with Banks/Lenders many people get very confused and frustrated. Getting a hold the right person, the same person you originally spoke with, or waiting for an answer could be nothing short of frustrating.
In trying to figure out your options with a Mortgage Relief solution, a professional working on your behalf to negotiate with the Lender(s) is the best scenario. As mentioned earlier, just the paperwork and documentation alone are overwhelming. Our clients don’t feel overwhelmed any longer. We do it all…as we like to say, from A-Z to get their homes Short Sale Approved!
The second type of person who can afford it, yet are thinking of cutting their losses, and letting the home FORECLOSE.
- The main issue is minimizing credit damage! With a foreclosure lasting on your credit from 7-10 years, some lenders aren’t willing to give you a loan for the next 7 years. That can hurt more than a home loan. With a lower score and more guidelines everyday, you may not be able to obtain a car, credit card, personal line of credit, etc… Creditors/Lenders find it hard to extend credit to someone who did nothing for months and let a home foreclose.
If you are in this boat, you need to seek the advice of professionals and look at all your options! This will be within your best interest in the future.
In conclusion, if we try to avoid letting homes go into foreclosure, we can hopefully better the situation of our economy in the long run. This not only will benefit you, but our economy as well. These are challenging times and the best thing to do is to weigh all your options. You need to be as proactive as possible and find professionals to help you. If you do nothing, someone will do it for you and you may not like the consequences that go with that. Be a part of the solution and fight for your credit!
