subject: You Can Get A Principal Reduction , for home owners underwater on their mortgages [print this page] If you owe more than what your house is worth, here is your options:
1.- Shortsale (if you want to get out of the house and avoid a foreclosure in your credit report)
and2.- Apply for a Principal Reduction Now there are two ways to obtain a principal reduction:
a) A company (lender company or hedge fund company) can buy the note of the property and re-structure the mortgage payment with a new principal balance (current market price for your property). No matter if you are behind, no matter your credit scores all is based in the value of your home, properties can be owner occupied, second homes and investments.
You MUST be careful if you decide to do this as many companies are SCAM, however is easy to identify these companies, if they charge and upfront fee for their negotiations then is a scam, many of these companies charge thousands of dollars upfront and provide nothing.
Select companies that their fees will be paid ONLY if they are successful and fees will be paid at the end of the transaction (keep in mind you may need a credit report and appraisal to know the current value of your home).
b) The second option is when the same lender is willing to do a loan modification and as part of this a principal reduction is negotiated. Depending on your lender you will need to apply for a HAMP and if you do not qualify for this some lenders have internal programs that can help you.
For the HAMP program the requirements are: must be your primary home, your current monthly mortgage payment must be over 31% of your gross income, must have income.
We found a company that have SUCESSFULY negotiated Principal Reductions (with NO UPFRONT FEES), you can click in the link and see the results and even a copy of the agreement provided by the lenders.
No matter if you do it or a company is doing this for you, be prepare to see results in 3-9 months.
What to do with a second mortgage?
This is a secure debt, to convert this in to un-secured debt and to force the lender to negotiate, the easiest way is to do a BK13 (of course is your decision and you must speak to an attorney for this). Good if your property is worth $125,000 and you owe tot the first mortgage $124,000 and you have a second mortgage (or HELOC) with another $100,000, you may negotiate this for may be 3% (or $3,000).... may be worth it.
You Can Get A Principal Reduction , for home owners underwater on their mortgages
