Options For The Underwater Homeowner

Good Afternoon, and Welcome Back, one and all!

   If you happened to catch my last post, "Strategic Default To Stop The Bleeding", we discussed the "taboo" topic of walking away from your Home Loan (and thus, your home). Of course, if you have some equity in your home, a Strategic Default would not make sense, therefore, the discussion was within the context of "Underwater Homeowners" (those homeowners that owe more on their Home Loan that the Home is actually worth).

   In a quasi-sequel to the above-mentioned post, I cannot stress just how major a decision it is to walk away from your home, and you (only you), would need to take a look at all of the factors (financially, legally, etc). What I will say is from some research done by Tara-Nicholle Nelson in her Inman.com story, "6 ways to save your underwater home", Nelson said that she noticed that "most upside-down homeowners don't really want to default on their mortgages". If that is the case, what alternatives do you have vs. walking away?

   At least 6 alternatives.

   Nelson laid out 6 alternatives, which include:
     * Get Rid of credit card balances and your debts.
     * Get a second job ("It won't last forever", says Nelson)
     * Start a side business/Monetize your spare time.
     * Rent out a room/rooms in your home.
     * Apply for loan modification and Government programs.
     * Short-sell your home with a local agent, attorney, etc.

   One other alternative is to keep your eyes and ears open. For example, there was a recent Bank of America special event that invited struggling BOA customers to meet in person with "home retention specialists", in a story from Leslie Berkman, titled, "Borrowers may meet with retention specialists". Some of the options for these customers were home loan modifications, among other alternatives.

   In summary, Nelson says that fortunately, your options for avoiding a foreclosure "are not so limited as they might seem at first glance". However, if you at that point of making this big decision, she highly suggests that you "consult with a reputable real estate broker, mortgage broker, local attorney and local tax professional -- at minimum".

   Are there any other alternatives that you can think of that were not included here. Please share it with your fellow readers.

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #StrategicDefault #HomeLoan #underwaterhome #loanmodification #BOA #avoidforeclosure #retentionspecialist #realeestatebroker #mortgagebroker

Combatting Home Loan Fraud

Hi Folks,
   Hope you had a good weekend, and as always, glad to have you back here today.

   In the wake of the mortgage crisis, today we pose the question, "Is enough being done to combat home loan fraud?".

   Linda Fleischmann, a Certified Mortgage Consultant, who is a mortgage broker that has been doing mortgage loans for over 12 years, says that she has, "seen fraud and I have seen the industries turning a blind eye to it when it was convenient". Currently, however, Fleischmann says that they are verifying more information now because of the previous fraud. and that, "There is an executed 4506T which gives the lender a copy of the taxpayers transcript of their tax return even for those borrowers who are not self employed and are W-2 employees. There are background reports such as Lexis/nexis that is pulled on all borrowers to make sure that they have all of their information, disclosed or not. There is much more investigation into fraud and all I's are dotted and T's crossed with lending today, even now to the extreme".

   Greg Cook, a Mortgage Professional, says that he thinks that lenders are using every tool at their disposal to combat house loan fraud, and he gives such examples as the fact that, "All income documentation is verified through the IRS (form 4506-T), Credit reports now have social security discrepancy warnings, which have to be investigated prior to closing, and All deposits in bank accounts, other than direct deposit paychecks have to be sourced and verified."

   One homeowner that fell victim to the crisis was Chris Moyer, who says that, "I lost a home to foreclosure some years ago. I had PMI and always wondered why it did not cover the outstanding balance on the mortgage. I received a form where I needed to claim the difference in the amount the house sold for and what I owed on the mortgage to claim on my income taxes that year. Could never figure that out?"

   Despite all of the measures, Cook says that, "Occupancy fraud is still the biggest problem, but the "buy and bail" guidelines make it more difficult to do it more than once."

   Is enough truly being done? What are your thoughts on this topic?

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com


TAGS: #homeloan #foreclosure