Attempt Loan Modification before a Short Sale
Short Sales, The Art of Selling
October 26th, 2009
Before rushing into any short sale we encourage those having trouble making their mortgage payment to consider attempting to negotiate a loan modification with their current lender. It’s possible that an agreement can be reached thats a win-win for all concerned. If you are in this situation please take the time to educate yourself on the options available.
The first thing you need to know about loan modifications is that help is free. Don’t fall victim to one of the many scams that target homeowners going through tough times. You should never be asked to pay an upfront fee for counseling and absolutly never be asked to sign over the deed to your home.
If you are struggling to make your house payment there may be help available to you under the Making Home Affordable program. This plan is designed to assist millions of homeowners who purchased their homes prior to January 1, 2009 with a first mortgage of $729,750 or less and a PITI payment that exceeds 31% of the family gross income.
Keep in mind that eligibility is not the same as approval. The successful approval of a loan modification depends on a number of factors including the borrowers ability to make payments at the modified amount.
Read the information on the Making Home Affordable site and feel free to contact us to discuss how to get prepared before contacting your lender with a loan modification request.
Even when successful there are times that the terms a lender may ask for on a modified loan are not sufficient to prevent a hardship. In the event you are unable to negotiate an acceptable loan modification then a short sale of your property may be your best option.
As always we encourage homeowners in this situation to consult a real estate attorney as well as a CPA. If it is determined that a short sale is your best course of action we can meet with you to go over the required paperwork and discuss your situation in detail.
