Loan Modifications, Negative Equity and Short Sales

Posted: November 29th, 2010 | Author: | Filed under: Uncategorized | No Comments »


...By Kiley Black

Negative equity is the term that describes the situation of having a home that is worth less than your mortgage. In layman terms, you are upside down on your home. Negative Equity is the result of the boom and bust cycle of the housing market. If you find yourself in this situation, you have a few options which consist of a short sale, foreclosure, loan modification or a deed in lieu of foreclosure. If you do not have the resources to sell your property, meaning you do not have enough money in the bank to make up the difference between what is owed and what you can sell the home for, your options are more limited. However, if you have the resources, if you have money in the bank, you can go the closing as a seller with money. In this way your credit can remain unaffected.

A loan modification is when, as the homeowner, you find yourself unable to make your monthly loan payment. You can work with your lender to get the loan modified, or lessened. This does affect your credit rating. Loan modifications show up as late payments, but you will be able to stay in your home.

A short sale is when your lender agrees to accept less than they are owed for an outstanding mortgage loan. A bank would much rather agree to a Short Sale than foreclose on a home.
No matter your situation when you have an upside down mortgage, you need a real estate attorney who is well versed in these procedures. Contact Black and Buono today.




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