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subject: What should you do when the value of home is less than the mortgage you pay? [print this page]

Author: Stephen Marcum
Author: Stephen Marcum

What should you do when the value of home is less than the mortgage you pay? Pillar Pro Deals Pillar Property Group representatives here this question everyday when we speak with homeowners. We would like to respond to this question based on our combined experience in the housing industry. First, it is possible the debt owed on your home can outweigh the actual value of the property you own. Of course you can wait until the value of your home increases depending on the debt you owe. But, who can afford such a wait when you must sell immediately. I have seen time and time again many property owners are in a situation where they have to sell their house immediately,"said Eric Skeeter, Pillar Property Group www.pillarpropertyforsale.com">

What can a homeowner do if they are in this situation? "Well, there are alternative options besides missing or not paying your mortgage payments," according to Skeeter. There is the short sale alternative. With this alternative, you have to tell the lender your financial situation and request them to accept less than you owe. You have to be upfront with the lender with your current financial status. "This option takes much effort and time for the homeowner. It is best to get someone to guide them through the process so it does not become too tiresome for the homeowner and they stop the process in midstream,"said Skeeter. www.pillarpropertyforsale.com">

What does this process involve? It does involve time and effort for the homeowner. These steps only outline some of things you might expect if you decide to proceed with this process: You must contact the loan servicing center of your mortgage provider. Loan servicing centers are not banks. They are collectors of your mortgage payment on behalf of your mortgage provider. To let you know, they will want documentation of your current financial situation. This will involve you submitting a financial statement to the lender. Now, you are asking yourself "what is a financial statment?" Simply, it is the total of all your bills not excluding what you pay in groceries and gas. Placing the home on the market, finding a buyer, and getting the offer that is needed. Dot every 'I'and cross every 'T' in the paperwork involved because there is a good deal of it. Finally, you wait for the approval process from the interested investor and lender. Basically, a short sale is a "forgiveness of debt," which does count as income in the eyes of the IRS and must be declared. "You can explore other options such as mortgage loan modification if choose to keep it."We work closely with Precision Funding with many current homeowners, who are in fear getting behind on their mortgages,"said Skeeter. For more information of Precision Funding's services, please call (717)779-1530.About the Author:

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