Many borrowers are faced with the dilemma of whether to stay in their homes or walk away due to the fact that their homes are "under water" - a term used when a home is worth less that the mortgage on the home.At first, I was wondering why would someone with a job, and having the ability to make his/her payments do such a thing knowing the consequences:
(i) a ruined credit rating; (ii) the foreclosure stays on your credit for seven years; and (iii) higher interest rates on purchases such as car insurance, etc.
Unfortunately, mortgage holders, banks in particular have not been forthcoming with loan modifications despite a national outcry regarding the urgent necessity to assist homeowners caught in this unfortunate situation. Without the ability to modify, a large number of homeowners are now seeing voluntary default as a viable option. Their hope is that by renting for a period, they can save enough money to put them in a better position to purchase when the market rebounds.
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Walking away from my home has crossed my mind. Our children are grown and we want to downsize. My husband has a chronic illness and can no longer work or help with the maintenance.
ReplyDeleteI considered putting the home on the market last year but the value had decreased by $100.000 which would have required us to have money at the closing.
I have been working with the mortgage company since July to get a loan modification. They have me in a trial program due to medical expenses only. If we were both healthy I would have had to be near forclosure before they would have considered the modification.
I decided to work a second job so that I can pay down the mortgage enough to sell it for less. For people that are forced to relocate their options are limited.
Though banks are "touting" modifications, the people who are truly in need of the modifications are not getting it.
ReplyDeleteHang on in there :-)