LOAN MODIFICATION OR SHORT SALE ... What's best for me?

And, as in most things and as I tell my children ... it Depends! What is your ultimate goal?

IF you are finding yourself in financial straits and feel the need to tighten your expenditures, these are something to consider. It is now no longer necessary for you to be behind in your mortgage payments to get some assistance, but it does depend on your long term goals. The fact of the matter is, if you purchased a home within the last 8-10 years with a minimum down loan, you are probably upside down in equity position. (Anyone who purchased a new car knows that feeling.) The good news is ... you're not alone. A huge segment of the population in general are in the same boat (or house as the case may be). So what to do?

Loan Modification IF you plan to remain in your house for the next 8-10 years or more, have no desire to move up or out and just wish to keep a roof over your head, this may be for you. And, you don't need professional assistance to get it done. Just make the phone call and the packet of information will arrive on your doorstep. But, warning, depending on your Loan Servicer, it takes patience. It may happen quickly or take months, but it does involve lots of paperwork and proving that you need help. And the end result may not be to your satisfaction either. Be aware that Lenders are not reducing the amount of the debt you owe; so, when you're finished with the process, you still owe as much on the house as your did originally and you're still upside down when it comes to equity position. What Lenders are doing is reducing the interest rate on your loan to lower your payments or extending your loan over a greater length of time. So, when it comes time to finally sell that house, you may still be in a short sale situation and/or have to come to the closing table with money to make it work.

Short Sale IF you have the need, desire or situation that requires that you sell the property, then the short sale is your answer. With this you'll need professional assistance from a knowledgeable Real Estate Agent, Lawyer and/or accountant to help you. Here you'll need to list your home for the current market value, find a patient qualified Buyer and trust your professional to assist you through the maize of paperwork required to complete the transaction. Again, this may surprise us all and only take a month to get approval, but experience has shown us it will probably take up to 6 months and often more. And, there's never any guarantee that your Lender will approve the short sale. One more caution, a short sale WILL effect your credit score negatively, so keep that in mind when making your decision.

As in all things relating to contracts, seek professional assistance to protect your rights. Please don't hesitate to call us if we can ever be of assistance.

Loan Modifications ... Your Bank May Come to You

It appears some banks may start becoming more human and humane. In an effort to stem the tide of vacant homes and struggling homeowners, a few of the banks are stepping forward to try to pre-empt the mortgage meltdown. We are seeing Asset Management Companies (companies hired by banks to manage their "at risk" mortgages and homes) hire Real Estate Agents to try to get in touch with their Borrowers. There's a whole new side of the Real Estate Business out there where agents are actually trying to assist people to stay in their homes.

Orders are sent out from these Asset Management Companies to real estate agents to get in touch with the Borrowers who have missed payments or are at risk of losing their homes. Agents are being a friendly face from the banks to give advice to Homeowners on what their options are and to deliver Loan Modification Applications, pick up and return the paperwork to the banks, or counsel and educate Homeowners on Modifications, Short Sales, Deed in Lieus and Foreclosures.

So, the next time you see a Real Estate Agent at your door, they may not be there to try to get you to list your property so they can make a sale and commission. They may be sent by your bank to help you stay in your home. Please welcome them in see if we can't work together to fix this current real estate market one house at a time.

Beware of Foreclosure Scams

As if we didn't have enough to worry about ... there are now some marginal companies out there who are choosing to prey on the hapless homeowner who is facing foreclosure and wants to try to modify their mortgages. If you want to try to reduce your mortgage payment or work out some solutions with your mortgage company, help is free! There is never a fee to get assistance or information about the Federal Plans to help. You can go to MakingHomeAffordable.gov to obtain a HUD-approved housing counselor to help you navigate the bureaucratic waters.



BEWARE OF ANY PERSON OR ORGANIZATION that asks you to pay a fee in exchange for housing counseling services. Do not pay, walk away!




BEWARE OF ANYONE who says they can "save" your home if you sign or transfer over the deed to your house. Do not sign, walk away. The only one who can help you "save" your home is your mortgage company.


NEVER SUBMIT YOUR MORTGAGE PAYMENTS to anyone other than your mortgage company without their approval.




If you have any questions or concerns about how to proceed, check the website above or you can always give us a call for our opinion or suggestions. We want everyone to be in a home they can afford and not lose it in foreclosure.