Why Walking Away Is Not The Answer.
Recently, there have been reports claiming that a “strategic default” can be appropriate and even a beneficial reaction to an upside-down mortgage or impending foreclosure. While this idea has spread rapidly, the truth is that a default is never an easy road to choose, and rarely is it ever strategic. In fact, defaulting on your mortgage can be incredibly dangerous and irresponsible when handling the financial future of you and your family. Unfortunately, the ramifications of a “strategic default” are rarely-if ever-explained, leaving many homeowners stranded on an island of misinformation.
If this is your situation, first understand you are not alone. Millions of homeowners nationwide are in similar circumstances. The only difference between them and you is that you’re looking for answers.
What’s the difference between a regular default & one that is strategic?
Default occurs when a homeowner falls behind on mortgage payments. This can be due to a hardship, which can include (but isn’t limited to) job loss, divorce, medical bills, or monthly income shortfall. Due to current economic conditions, literally millions of homeowners across the country have found themselves in a default situations. For homeowners in default, programs have been initiated through the administration and lending institutions to provide solutions and to salvage financial futures.
In strategic default the homeowner simply chooses to walk away from the mortgage–in other words, move out and stop paying—even though they may be able to make the payments. This is often done when a homeowner owes more than what the home is worth, and views the home as a bad investment. However, most of these homeowners do not understand that walking away from the mortgage will expose them to foreclosure, credit issues, current and future employment challanges, and possible debt collections.
If you’re underwater on your mortgage or behind on payaments, you need to know that there is time to analyze your options before foreclosure happens. More imortantly, there are alternatives that will protect your credit and financial well-being.
Mortgage lenders are looking to avoid the foreclosure process just as much as homeowners. While they are not in the real estate business, some have further options to help homeowners avoid foreclosure.
So Whats Your Best Option?
First you will want to contact aa agent who knows how to navigate these situations to learn more about your possible options. As a CDPE-Designated Real Estate Broker. I can assist you in organizing all the necessary paperwork and ensure you have everything you need to make an informed decision on your future.
There are other, safer alternatives to foreclosure—including a short sale–then the harmful results of a strategic default.
Many homeowners are still facing uncertainty. They do not know what to do next for themselves and their families(I have talked with many of them). Despite all attempts to hold on, foreclosure has become a reality that if not addressed or handled correctly can have a devastating outcome. Now more than ever, you need to prepare yourself to navigate the mistakes that are most commonly made.
The Us Treasury Recently Announced New Incentives
The Us Treasury recently announced new incentives, timelines and procedures for short sales. The Hafa Prgram, part of the Home Affordable Modification Program (HAMP), simplifies short sales procedures be setting limits on the time it takes lenders to respond, freeing borrowers from debt and capping claims of subordinate leinholders.
As a Cdpe-Designated real estate broker, i have the most current information on this program and participating lenders. Please call me to discuss your options. Call/text: (763) 443-6680
I believe every homeowner The Best Information Possible!
I believe every homeowner deserves the best information and education to avoid losing their home to a foreclosure and damaging credit for years to come. If you are struggling to pay the mortgage and unsure of what to do next, understanding these options-especially short sales– can ease your stress and potentially save you from a impending foreclosure. Deciding on which route will be best for you and your family’s future is the most important decision you can make. Please use this information to better understand the options available. As a CDPE, I have been specifically trained to assist homeowners in these difficult situations. If i can provide you with more information and assistance, please do let me know and don’t hesitate to contact me directly.
Richard McDeid Our Home Real Estate Call/text: (763) 443-6680
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