The foreclosure rate continues to climb. Millions of Californians owe far more than their homes are now worth. What to do?
If you owe more than your home is worth, one option is to ask your lender for a loan modification.. This is similar to a refinance except the lender agrees to reduce the balance, the total amount you owe on the loan, to at or nearer its current market rate.
In the Economic Stimulus Bill passed earlier this year can be found an obscure provision: lenders may reduce loan balances to 90% of current market value. This sounds good, right? The problem here is that this program is voluntary. Many lenders, of course, hope that borrowers who are “underwater” on their mortgages will pay them anyway.
If you fall into this category, ask your lender to modify your loan. You will need to submit a brief financial statement and supporting documents, but the potential payoff is great.
Another option if you can no longer pay your mortgage due to divorce, job loss, medical issues or other financial problems, is to sell your home. By cooperating with your lender, you can sell your home for less than you owe. This is called a short sale. Again, you submit financials and supporting documents.
If you are having difficulty with either of these options, contact me by calling 626-641-0346 or email me at firstname.lastname@example.org, and I will help you.