Up Side Down, Right Side Up – Sometimes You Just Need to Know Your Options

March 31, 2012 by  Filed under: Marketing 

Owning real estate right now can be a tenuous proposition. Many people that we talk to bought their houses in the last 7 years or so. Unfortunately they bought their properties at the height of the real estate market. Now so many people are upside down, owing more than their house is worth. Being upside down in and of itself is not necessarily a terrible thing. If you can still make your payment comfortably and are reasonably sure that the value of the property will eventually be worth more than you paid for it, then you can ride out the market.

The problems come when you are stretching to make the payments. Sacrificing other payments to keep up with a property that you are upside down in can be a really bad for your financial future. For the last several years there has been a rash of Strategic forfeitures. People are just turn their houses over to the bank because they are so far in the hole.

In some cases they owe two thirds even twice what the house is worth. How are the banks dealing with this? They are putting up a fight and doing everything they can to stop this practice. Now I am not saying that people should just stop paying their mortgages and give the house back to the bank. For many this is not the option at all.

The Federal government has also made moves to provide relief to struggling homeowners. The red tape involved is often slow and difficult to wade through, resulting in spending a bunch of time that is wasted. I have read that less than 20% of those that submit the application are actually seeing results from the effort.

Also the requirements for government can be quite stringent. Those property owners that have been late in the last 12 to 18 months need not apply. I watched new conferences held by President Obama where he kept repeating, that he wanted to help out “Responsible Homeowners.” Personally I take offense to that. I know many people that have been late in the last 18 months for many good reasons, many of which had nothing to do with them being irresponsible.

Many people come to us, who are struggling; their house is one of those burdens that are often the straw that breaks the camel’s back. Often people make the tactical mistake of letting other payments go so they can pay their mortgage payments. The problem is that by the time they’re in trouble on their house they are not in a position to refinance or receive any help.

The best advice we can give is to seek assistance early. When you think that you might not be able to make your payment then seek help. The problem then is that many organizations will not work with you until you are 30 or even 90 days behind. It really is a catch 22.

If you find that you are in a position where you are in trouble and need assistance. Do not hesitate. Find out your options sooner rather than later. If you do that then you have more options available to you. When you are out of conventional options you can then seek out the more non-conventional options. Even though some of these options may not be well known, they are valid for specific situations.

If you find that you just don’t know what to do or even what you possible could do. Give us a call. We work in these types of situations on a day in day out basis. We work with many financial institutions and resources around the bay area. We don’t charge for a consultation. So don’t hesitate.

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