Mortgage Problems - Do a Short Sell and Have Debt Relief

Are you in a bad financial situation with your home loan? Has your house fallen in price and now you owe more money than the house is even worth? Then the answer for you is a short sell, it allows you to sell your house for below market value but keeps you from a foreclosure which can hurt your credit rating and your financial situation.

A lot of us have felt this downturn in the housing market. If you have bought a house recently within the last 2 years, then you are feeling the pinch with your houses value dropping more and more each day. It is time to understand what your options are, do not panic.

A short sale is a nice option for you to get out from possible foreclosure and sell your house. Let's say you try the traditional method of selling a house that you are upside down in. You have a house that has a $200,000 mortgage on it and now it is worth $150,000, when you sell the house at closing you are going to be required to come up with the additional $50K or the deal will not go through. Most people don't have extra cash like that laying around.

When you do a short sell you need to contact the lender and get their approval, each state has different laws. They will allow you to sell the house at whatever the market is at and you can negotiate with the lender to relieve you from the loss that is taken on the property. A lot of times the lender will agree to this because they know their other option is foreclosure. When they have to sell a foreclosure they usually will only get 50 to 60% of the market value of the house.

The important thing to remember is this can be a good option for you to get out form a upside loan burden and more on with your life.

For more information on Mortgage Problems and the benefits of a House Short Sell go to:

http://www.bigloanguide.com

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Government Mortgage Relief Plan

Nationwide news channels are filled with reports on the Obama stimulus plan and focused mostly on the 75 billion allocated by Obama's administration for Mortgage Relief. Obama's plan focuses on keeping up to 9 million people from foreclosure. Helping these homeowners avoid foreclosure is vital to stabilizing home prices and ultimately the economy.

The plan is pretty simple, give incentives to mortgage lenders for getting out of their seat and helping homeowners facing foreclosure. Something they should of done a long time ago. Many homeowners facing foreclosure have become drenched in debt, their debt to income ratio has far exceeded the guidelines for getting a mortgage in the first place. This can be attributed to predatory lending at which time the loan was originated, however; most homeowners are dealing with lower income due to job loss. Mortgage payments are typically the bulk of a homeowners debt.

Obama's plan focuses on cutting mortgage payments to acceptable levels, which they have designated as 31% of the homeowners total income.

The other part of the plan would help homeowners which have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac. Homeowners that are upside down on their mortgage, owing more than their home is worth, can refinance with a special program. Normally equity or LTV (Loan to Value) is a major factor in refinancing. The bank or lender is willing to take more of a risk if you have equity in your home. They believe homeowners are going to fight tooth and nail to keep their mortgage if it has 15-20% equity. Homeowners that are upside down on their mortgage currently have no options for refinancing into a lower mortgage rate. Their mortgage rates in many cases have adjusted and they are stuck with an inflated mortgage payment and declining home values. Removing these restrictions is estimated to help up to 5 million homeowners reduce their mortgage payments.

Keeping mortgage rates low for homeowners that can refinance and new homebuyers is key to stimulating the economy and keeping banks afloat. Mortgage rates may be reduced another .5 percent to a new historic low of 4% for a 30 year fixed mortgage. Overall the mortgage relief plan is solid, but it is not very clear how deep this crisis runs. The government has funneled billions of dollars into banks such as Bank of America, but they know little about the damage done to their balance sheets. From the sign of the banks declining market value and need for more bailout money it is safe to say the government may be in for a big surprise when they get a in depth look into the banks they have been assisting.

Waiting on mortgage relief for foreclosure relief from the government is not something recommended by most in the financial industry. If you are struggling paying your mortgage now you should see foreclosure help immediately.

Chris Timmons
Mortgage Modification Legal Network
http://www.WeSaveHomes.com

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