Loan Modifications Not Worth The Excitement

We wanted to take some time to speak with you about loan modifications. One of the more popular questions we hear from property owners is “What should we do about our house?” The home owners don’t want to leave their houses. Nonetheless, they are either behind on their payments or upsidedown with their mortgage. They frequently contemplate doing a loan mod.

We simply want to let you know that the government and the media talk regarding loan modifications repeatedly. Still, they aren’t nearly as valuable as the government or media would have you believe. There are some good loan modifications that occur. Yet, less than one in ten really get approved. Some of you watching this may have by now found this out by applying for a loan mod yourselves.

You should know that there are two kinds of loan mods, principal reduction and change to rate or payment. A principal reduction is nearly non-existing. Maybe one in 500 get approved. The principal reduction is where the bank says that your mortgage is worth $200,000, but your property is worth $150,000. So the bank redoes your mortgage for $150,000. Nevertheless, be aware that if you get a principal reduction you are responsible for the taxes on that $50,000 gift from the lender.

Payment reductions are seen occasionally. When they happen, they are good temporary fixes. Nevertheless, most people find out that there comes a certain time when they choose to default it. It still does not address the fact that your residence is not worth the value of your loan. We are not saying that the loan modification decision isn’t for you. However, most people usually end up going to the short sale method. The short sale enables you to get a clean start and meet the criteria to buy a property in as little as two years.

Most people understand that the loan mod did not help them after the first few months. We would love to have the opportunity to speak with you. A short sale is the best option for most residence owners looking for relief.

Short sale FAQs and more.

Get more information on selling your home from Kevin and Fred at My First Short Sale by the Short Sale Specialists of Arizona