Upside Down on Your Mortgage? Know Your Options
We Understand Your Unique Needs and Offer Solutions Tailored to Your Unique Circumstances
With the monumental loss in property values throughout the state and nation, many homeowners are finding themselves stuck with a property that is now worth only a fraction of what they owe on it. And with the weak economy, loss of family income, and rampant unemployment, many families are finding it difficult to keep up with their mortgage payments. While several government developed programs offer help, each homeowner has their own unique story and are looking for the solution that best fits their unique circumstances.
We understand exactly what you are going through. It may surprise you to learn that we have helped hundreds of homeowners who have experienced what you are facing. We have been in this difficult market for some 5+ years now, and while many of the programs and details change, the basics are still much the same.
Basic Options for Distressed Homeowners
- Mortgage refinance or modification: Only 10% of qualified homeowners are successful in securing a comprehensive modification, and of those that do, up to 50% default again within the next 12 months. Modifications are usually only available to borrowers who occupy the property as their primary residence. Recent changes may offer a government refinance option if your current loan is a government loan.
- Deed in Lieu of Foreclosure: Some lenders offer this option but only if you have been unsuccessful at a modification and at attempting a short sale transaction, and if you have a 2nd mortgage or other liens, this option is very unlikely.
- Short Sale: This option works for both borrowers who occupy the property as their primary residence and borrowers who have rented out the property and own another property as their primary residence. There are two types of short sales (HAFA and Traditional) and each have their own qualification criteria, benefits, and short comings.
- Bankruptcy: This option helps address unsecured debts. Once you go through the bankruptcy process, you still have to decide what to do with the property you own, and so this step usually only delays choosing one of the other options listed and may eliminate some options depending on your particular circumstances.
- Downsizing: By moving into a low cost rental and then renting out the more expensive property to cover the payments, you may be able to hold on to the property. The important question to ask is whether or not that is strategically the right move for you.
- Foreclosure: Allowing the bank to foreclose on the property and then take possession of it, relieving you of the debt in most instances and also removing you from possession of the property.
Trying to sort through these options and choose the best course of action can seem complicated and overwhelming. We are available for a confidential consultation at no charge. We will provide detailed information on each of the alternatives and answer any questions you may have that are within our field of expertise. If you are not quite ready for a consultation, we have free information prepared by accredited real estate attorneys that we are happy to share with you.