When it comes to just letting your home go to foreclosure and walking away there is a lot to consider. A large number of homeowners make this decision after they are denied for a loan modification by their mortgage company. In some cases it makes perfect sense to walk away because the homeowner has exhausted all the resources they know of to try and stay in their home.
This is a big problem because most homeowners don’t understand the detailed guidelines of the loan modification programs available and often disqualify themselves by error. However, a very large number of my private loan modification clients had tried to get a loan modification on their own with the help of their mortgage company and they were denied. They then hired me and I was able to get a loan modification in place because I have the specialized knowledge to get it done.
This is very important for anyone that was turned down for a loan modification by their mortgage company without seeking help from a good third party. Before you decide to walk away from your home make sure that you talked with a quality third party company about your options. Personally, when I analyze a potential modification client I look for several factors that will allow them to qualify for the programs available and if I don’t feel that they have a good chance at qualifying I give them advice on what to do from there.
One thing to keep in mind is that there are thousands of third party loan modification companies drooling for your business. Not all of these companies are good companies and some will promise you “pie in the sky” results just to get you to send in a check. If something sounds too good to be true, go with your gut. Also, be very aware of any third party that gives you any potential modification results, such as a 2% interest rate or any type of principal reduction, without getting detailed income and mortgage information.
Later in this post, I’m going to give you a list of questions to ask yourself before deciding to just walk away. But first, I want you to check out the following articles on this subject that lend some credibility to what I’m saying. The first article was written by David Streitfeld for the New York times and you can view it by clicking the article title “No Help in Sight, More Homeowners Walk Away.”
The next article I want you to take a look at is about the property values of three counties in Michigan, Oakland County, Wayne County, and Macomb County. Sorry if you don’t live in Michigan but other states like Florida, California, Nevada, and Arizonia are seeing the same, or even worse devaluation. You can view this by clicking on the title, “See how property values have plummeted.”
The last article that I would like you to check out is about how some lenders are going after borrowers who made the decision to walk away. Former homeowners may still be on the hook if there’s a difference between what they owed on their mortgage and what the bank could sell it for at foreclosure auction. And these “deficiency judgments” are ticking time bombs that can explode years after borrowers lose their homes. This seems unjust especially after the homeowner already had to sacrifice their home which is what the mortgage was secured by. This article was written by Les Christie, staff writer for CNNmoney.com. You can view this by clicking on the title, “Mortgage lenders pursue homeowners even after foreclosure.”
On the lighter side of this topic, I’d like you to watch this video of Stephen Colbert from the Colbert Raport. It’s very funny and unfortunately very true! I hope you enjoy it.
| The Colbert Report | Mon – Thurs 11:30pm / 10:30c | |||
| The Word – Honor Bound | ||||
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The following are the questions that you should ask yourself if you’re considering walking away from your home;
- Can I rent a home similar to mine in my area for less than my mortgage payment including taxes and homeowners insurance?
- Do I owe 25% or more on my home than it’s currently worth?
- Has my lender already turned me down for a loan modification?
- Have I contacted a quality third party loan modification company to verify that I can’t get a loan modification?
- Have I considered riding out my states foreclosure process and staying in my home for as long as possible without paying a dime?
- Am I worried about my credit score and if so, why?
- What is my plan if the lender comes after me for a deficiency judgment?
