Escape Your Unmanageable Mortgage
For some distressed homeowners, even the thought of taking action to remedy their unmanageable mortgage situation is more than they can contemplate. Far too many homeowners end up losing their homes to foreclosure without ever seeking help from any source.
Common Foreclosure Alternatives include:
- Short Sale
- Rent the Property
- Mortgage Modification
Government Programs for Homeowners
HAFA – Home Affordable Foreclosure Alternative. Homeowners who qualify for a HAFA short sale receive $3,000 in relocation assistance, according to the current plan guidelines.
HAMP – Home Affordable Modification Program. HAMP reduces a homeowner’s monthly mortgage payment to 31% of gross income, following a series of steps on the part of the mortgage servicer. These may include a rate reduction, term extension of up to 40 years, deferred principal payments and possibly a reduction of principle.
HARP – Home Affordable Refinance Program. If the mortgage is backed by Fannie Mae or Freddie Mac, HARP originally allowed homeowners to refinance if the first mortgage did not exceed 125% of the current market value of the home.
HARP 2.0 – The key point here is that eligible borrowers can finance regardless of how underwater the mortgage is.
Mortgage Debt Relief Act – Starting in 2007, the government attempted to address the issue of the large tax burden created by the foregiveness of debt. The IRS considers a forgiven debt to be income, and taxable. The Mortgage Debt Relief Act excuses this tax burden, but the act expires at the end of 2012.
Avoid Mortgage Scams
Leave it to the bad guys to target people who are already under stress and desperately looking for relief. Know the signs of a scam:
- You are told you will receive a federal incentive to walk away from your mortgage
- You are asked to pay upfront for counseling
- You are pressured to sign papers immediately
- You are asked to sign your house over to a company or person not working with your mortgage company
- You are asked to make a mortgage payment to someone other than your mortgage company
- You are guaranteed a successful short sale or mortgage modification
- They claim to be a representative of the federal government
- They claim to be able to arrange shorter waiting periods to get another mortgage
If you believe you have been a victim of a scam, contact the Federal Trade Commission (FTC) at 1-877-FTC-HELP (1-877-382-4357) or visit their Complaint Assistant: https://www.FTCcomplaintassistant.gov
One of the Most Important Things to Know
The sooner help is sought, the more options are available, and the greater chance of success.
As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to provide financially strapped homeowners with alternatives to foreclosure, help them steer clear of scams, and assist them in finding the solution that best meets their needs.
These are tough times, but more help is available than ever before. If you or someone you care about needs help to realign the balance of your financial life and tip the scales back in your favor, contact me today and let’s get started.