Well there are a few
options available to homeowners who are stuck with a home whose mortgage value
exceeds the current property value or home is worth less than the mortgage
or upside down mortgage or underwater mortgage.
Lets take a quick look
at them shall we? One of the options is the government program known as HARP
the Home Affordable Refinance Program. Homeowners must meet certain criteria to
be eligible:
1. No delinquent
payments in the last 12 months or you are disqualified automatically.
2. The loan must be a
Fannie Mae or Freddie Mac loan to be eligible.
Your credit score will
be looked at in addition to overall payment history, the way the financing of
the loan was structured and your particular lenders guidelines. So not everyone
is going to be eligible and qualify.
Ultimate approval rests
with the lender. Good luck.
Let's take a look at HAMP
the Home Affordable Modification Program:
If your home is
underwater and you have missed payments you might qualify for this one.
You have to show that
you have a financial hardship that puts you in danger of imminent default.
Again the mortgage has
to be owned by Fannie Mae, Freddie Mac or other blender who have signed up with
the government for this program.
The main thing is that
HAMP is not a refinance, its just a change to the terms of your mortgage...temporarily
up to 60 months.
Basically a temporary
modification. After that your mortgage rate is going to increase by about 1
percent per year until it reaches the market rate you were at when your
modification was approved.
There are other strict
guidelines as well such as the home must be your primary residence, the
mortgage amount must be less than $729,750, your monthly payment has to be more
than 31 percent of your income and you must prove you have difficulty actually
making payments.
You will be in a trial
period for 90 days and the lender will reassess your situation again to see if
you qualify for the HAMP. Again ultimate approval is with the lender. Again
good luck.
Your lender MAY have an
in house modification or loan restructuring program as well. Really good luck to
that.
Of course if none of
these are an option then you do have the...short sale option.
This option is when the
lender approves the house to be sold at current market values and the
difference MAY be waived and forgiven...if your lucky. If not, you are on the
hook for the difference.
A little known fact or
hidden fact that is kept from homeowners who are offered this option by some
realtors who perform short sales is that the credit ramification or hit you
will incur on your credit or FICO score is going to be the same as a
foreclosure.
Sure it won't say
foreclosure on the report, it will say short sale instead but the credit score
is essentially the same. This information and fact was actually put out by the
FICO people themselves.
Take a look at the chart
below that they have provided:
So these are pretty much
the standard options for most homeowners.
However there is another
option that most do not
consider simply because they aren't aware that it exists. This one involves a
company called Homeowners Relief Options.
They actually take over
your home and mortgage payment regardless of the amount or how much you are
upside down or underwater on your mortgage via their Homeowners Relief Program.
Yes. They will get your
mortgage paid every month through various in house programs that they have.
However you must allow them to be owner of record at your local county
recorders office where the property resides and you must no longer reside in
the property or will vacate soon. After all why would they take a risk and pay
a mortgage on a property they don't own?
Look at it this way.
Your credit rating will not reflect foreclosure or short sale and if the above
options (HARP, HAMP, Short Sale) are not feasible or available at least Homeowners
Relief Options will pay the mortgage until the house sells or the mortgage is
paid off.
Can your realtor do that
for you? Besides lenders do not care who is paying the mortgage as long as it
gets paid. Food for thought and another option.
Homeowners Relief
Options. They take over your mortgage payments and you move on.
by C. Lenett
Homeowner Relief Options
