Although it seems as though the housing market may be on an upswing, there are still millions of distressed homeowners who are drowning in the sea that is their mortgage payments. While there is a lot of help out there for some qualifying homeowners, some do not qualify for any aid regardless of their need or situation. That is why some homeowners have had to get creative with their solutions. Here are some of those solutions that are gaining in popularity.
Short Sales
You have probably heard this term making the rounds in the real estate industry but you may not know what it means. When a homeowner has to resort to a short sale, it means that they owner finds a buyer for the home and then those two parties along with the bank that holds the mortgage negotiate a deal that works for everybody. Because there have been so many short sales going on in recent years, it may take a long time to get the lender to respond to a request. During that time, you may incur more debt if you are unable to make the mortgage payments while you wait for the lender.
Foreclosure
Foreclosures are running rampant these days with the rising number of distressed homeowners. A foreclosure occurs when a lender takes ownership of the property due to nonpayment and forces the homeowner to move out of the home. Because of the high number of foreclosures, many lenders are actually paying people to move out of their homes as log as they leave the property clean and livable once they leave. There have been too many disgruntled homeowners leaving their house in disarray or totally demolished before leaving it for good so lenders want to offer an incentive to keep people from doing that.
Strategic Defaults
With a strategic default, the homeowner voluntarily walks away from their home and mortgage because they simply feel they will no longer be able to make the payments. Homeowners may choose a strategic default for several reasons. They might want to try to get another mortgage loan before the defaulted loan goes on their credit report. They might also want to cut their losses. Either way, the homeowner decides the payments are too high and the best financial thing to do is to leave it all behind. This strategy has seen a jump during the first quarter of this year. In fact, there are more homeowners that have chosen this option than the number of permanently modified mortgages to date.
Are you having problems paying your mortgage? What are some of the options you have considered?
Add your Comment
or use your BestCashCow account