Thursday, May 21, 2015

How Can I Get Out Of An Underwater or Upside Down Mortgage???

Well there are a few options available to homeowners who are stuck with a home whose mortgage value exceeds the current property value or home is worth less than the mortgage or upside down mortgage or underwater mortgage

Lets take a quick look at them shall we? One of the options is the government program known as HARP the Home Affordable Refinance Program. Homeowners must meet certain criteria to be eligible. 1. No delinquent payments in the last 12 months or you are disqualified automatically.  2. The loan must be a Fannie Mae or Freddie Mac loan to be eligible.  Your credit score will be look at in addition to overall payment history, the way the financing of the loan was structured and your particular lenders guidelines. So not everyone is going to be eligible and qualify. Ultimate approval rests with the lender. Good luck.

Lets take a look at HAMP the Home Affordable Modification Program. If your home is underwater and you have missed payments you might qualify for this one. You have to show that you have a financial hardship that puts you in danger of imminent default. Again the mortgage has to be owned by Fannie Mae, Freddie Mac or other blender who have signed up with the government for this program. 

The main thing is that HAMP is not a refinance, its just a change to the terms of your mortgage...temporarily up to 60 months. Basically a temporary modification. After that your mortgage rate is going to increase by about 1 percent per year until it reaches the market rate you were at when your modification was approved. 
There are other strict guidelines as well such as the home must be your primary residence, the mortgage amount less than $729,750, your monthly payment has to be more than 31 percent of your income and you must prove you have difficulty actually making payments. You will be in a trial period for 90 days and the lender will reassess your situation again to see if you qualify for the HAMP. Again ultimate approval is with the lender. Again good luck.

Your lender MAY have an inhouse modification or loan restructuring program as well. Really good luck to that.

Of course if none of these are an option then you do have the...short sale option. This option is when the lender approves the house to be sold at current market values and the difference MAY be waived and forgiven...if your lucky. If not, you are on the hook for the difference.  

A little known fact or hidden fact that is kept from homeowners who are offered this option by some realtors who perform short sales is that the credit ramification or hit you will incur on your credit or FICO score is going to be the same as a foreclosure. Sure it won't say foreclosure on the report, it will say short sale instead but the credit score is essentially the same. This information and fact was actually put out by the FICO people themselves. Take a look at the chart below that they have provided:

So these are pretty much the standard options for most homeowners. 

However there is another option that most do not consider simply because they aren't aware that it exists. This one involves a company called Mortgage Relief Solutions. They actually take over your mortgage payment regardless of the amount or how much you are upside down or underwater on your mortgage. 

Yes. They will get your mortgage paid every month through various in house programs that they have. However you must allow them to be owner of record at your local county recorders office where the property resides and you must no longer reside in the property or will vacate soon. After all why would they take a risk and pay a mortgage on a property they don't own? 

Look at it this way. Your credit rating will not reflect foreclosure or short sale and if the above options (HARP, HAMP, Short Sale) are not feasible or available at least Mortgage Relief Solutions will pay the mortgage until the house sells or the mortgage is paid off. Can your realtor do that for you? Besides lenders do not care who is paying the mortgage as long as it gets paid. Food for thought and another option.

Mortgage Relief Solutions. They take over your mortgage payments and you move on.

Acquisition Manager
Mortgage Relief Solutions

See for more information.