If you are struggling with your mortgage payments or facing foreclosure, you may feel overwhelmed and frustrated. Many homeowners simply don’t know what to do or where to go for assistance, and they feel too helpless to take action.
The most important factor for financially distresses homeowners to keep in mind: The sooner help is sought , the better…. Take action NOW!
A Loan Modification is a permanent change in one or more of the terms of a Borrower’s loan, allows the loan to be reinstated, and results in a payment the Borrower can afford. A loan Modification can reduces a homeowner’s monthtly payment following a series of steps on the part of the lender that can include:
- Interest rate reduction
- Term extension to 40 years
- Deferred principal payments
- Possibly lowering of the principal
A short sale can be an excellent solution for homeowners who want to avoid Foreclosure and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.
But to be technical, here’s a more official definition:
- A homeowner is ‘short’ when the amount owed on his/her property is higher than current market value.
- A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then ‘sold short’ of the total value of the mortgage.
For homeowners to qualify for a short sale, they must fall into all of the following circumstances:
- Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
- Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
- Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
** As of May 15th 2012 Bank Of America is offering for a limited time a ” Short Sale Relocation Assistant Program”
- Pre-Approved price short sale program
- Qualified homeowners who initiate a short sale withoout an offer could be eligible to receive $5,000 to $30,000 in relocation assistant
- Homeowners could own no more on their mortgage with the sale of the property.