The national trend in homeownership in the past decade had involved the loosening of credit. Who have been the beneficiaries and or victims of this? How can YOU sort it out?
Mortgage Brokers (not a lot of supervision during this time allowing legal loopholes that were good news to everyone, AT FIRST)
Mortgage Resellers (same as above)
Mortgagees (many were buying risky mortgages but did not know it because they were “bundled” by institutional mortgage brokerages.
Mortgagors: This is you.
You love your family. You want better for them than you had. So, you gave it to them betting on stability that would last, until the nest was empty (at least). You may have been betting on future income increases to cover future interest rate increases you agreed to up front. You may have decided financeable home improvements were necessary. If the money came too easy, you may have purchased other items to put a smile on everyone’s face. Who knows and who cares at this point. It’s done! You have accepted the liability for paying back a loan and pledged your families dwelling as collateral. That’s right, your FAMILY’S dwelling. The place where you celebrate births, birthdays, Christmas, neighborhood block parties, and the list goes on.
Has it been worth it? Let’s keep the answer YES! Memories are precious and cannot be taken away. Unless, of course two factors intervene: (these may be painful but read and then move on).
1. You are perilously upside down in equity and your housing payment is being nudged out by other family expenses. In today’s economy the idea of increasing income to maintain positive cash flow has disappeared.
2. You cannot separate emotion from business in terms of this decision you made when you signed on the dotted line. Number 1 is done. Number 2 can overshadow the beautiful memories you have already made. But it doesn’t have to. You have a business decision to make and you can keep it simple. Avoid emotion and base your decision on the following question: How do I protect my cash flow, keep my family happy and safe, and make a home where it’s immediate future is stable? The first step is to realize that staying focused on being positive and finding smart ways to increase your household income.
The second is to decide what you want your housing payment to be in order to take care of “the fam”. Make a budget and do it now!! When you get to the housing payment number, back into it based on the income and other expenses you have listed. As long as you have taken every reasonable step to minimize your household expenses and you make reasonable estimates regarding your household income, regardless of how unacceptable the housing payment might seem to be, use it. Once you have done this stick to your budget. Pay the mortgagee what’s in your budget and give them a copy of the budget if you submit a loan modification application. This is the best way to get a loan mod approved if the payment you are making is going to be acceptable to them. If it’s not, at least you were honest with them and with yourself.
As a rule, if your proposed housing payment is not compatible with the local rental market for a similar home, your hopes for approval of a loan mod are diminished. Furthermore, you will need to re-examine the budget. If the budget is carrying minimum payments on unsecured debt (credit cards, etc) then you should consult with a Bankruptcy Attorney. The attorney might be able to get you protection and might even help save your house.
In the long run, one of two things are true: You are going to stay in this home or you are not. If you are not, then you can default and, in 3+ months your title and right to reside in the home will be lost in foreclosure. (Ok, breathe deep and put your business hat back on. Ready? Ok, let’s go) There is a lot legislation and new laws flying around regarding Short Selling the home as it pertains to debt forgiveness, eligibility for debt forgiveness, and whether or not this is a taxable event. There are new laws and moratoriums on existing laws that are allowing short sales to proceed. Bite the bullet early on and see a recommended CPA/Tax Accountant. Regardless of what answers you get, you may decide that you do not want a foreclosure on your credit history. In this case, we would like you to contact us:
Coldwell Banker Residential Brokerage
The short sale process involves the following steps:
1. Listing your home for sale with the Wren/Bodemer Team,
2. Setting a price that is fair market value,
3. Signing a ‘Right to Receive Convey Information’ so we can negotiate with your bank,
4. Show your home to prospective buyers when we bring them over,
5. Accept an offer we all agree is workable,
6. Allow us to use our knowledge, on our time, to negotiate with the bank,
7. Work with us through closing the sale,
8. Move on with your life.
We strive to keep all matters private and professional. It is our goal to complete the sale and allow you to improve your financial future. Along the way we want to respect your family’s dignity and privacy. Because, like we said, IT’S BUSINESS. Please call us soon and, by all means, recommend us to people you care about.
Much success to you, now and in the future,
Coldwell Banker Residential Brokerage