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Serving all
Orange County
Map of
Foreclosures in your area
Videos...
The Credit Crisis
Explained Part I
The Credit Crisis Explained Part II
Assessing
the Global Economic Crisis
60 Minutes
Video: A new foreclosure wave coming soon
The Next Financial Crisis
What to do if your
house is worth less than your loans...
If you are "underwater" in your house, it makes sense, from a
financial planning perspective, to sell this bad investment and
cut your losses. Your house is the largest financial
investment in your lifetime, - you pay for it through debt repayment. If the underlying asset
(your home) drops in
value with respect to the current loan balance, you
need to calculate how long it will take you to receive a Return
On Investment (ROI). For example, if you are $200,000 underwater, it may take a decade or more to just break even
where you can sell your house without any return at all. If
you
Short Sale the property now, buy
a new one in 2 years, you may be better off. Contact your
Financial Planner before you decide on this major decision: work the
numbers...
Read these articles first:
1)
When Default Is a Strategy
2)
Obama's Loan Modifications
3)
Mortgage Modification Efforts
Then go to
Don's
Corner; develop an understanding of the
current housing market - make an informed decision, today.
"Walking Away", sounds great;
homeowners walk away from their houses and leave the keys in
the mailbox. Are their problems behind them? NO!
The fun is just beginning. The first mortgage will most
likely be gone if it is a "Purchase Money" (non-recourse) loan
type and you reside in the state of
California
(check your state). If it is a "Cash Out" re-finance loan,
then it may be a recourse loan where the lender can still come
after you after the auction for the deficiency.
A Home Equity
Line Of Credit (Heloc), however, is a recourse loan which may be
"Charged Off" by the bank then sold to a collection agency for
pennies-on-the-dollar. These collection agencies have the
legal right to sue the homeowner in court to receive a
Deficiency Judgment against them and collect the full amount.
This may force the homeowner to declare bankruptcy; now the
homeowner has both a foreclosure and a bankruptcy on their
credit record: a
Short Sale is a much better solution
with much less impact to their credit. Many homeowners can
purchase a new home in as little as 2 years.
Good luck!
Don
anewstartoc@gmail.com
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