A family friend has bought his house for around 130,000 around 10 years ago. The current home value is 44,000 and he has to pay around $900 in mortgage payments. Is there any way to lower, or even stop, the payments altogether? What is the best solution for this dilemma?
the best thing he can do if he is having problems making his payments is to call loss mitigation at his mortgage company and apply for hardship assistance. they may be able to qualify him for a modification depending on his financial situation. a modification will bring his act current if past due, lower his rate and possibly extend the loan term to lower the pmt as much as possible. if this is not a option with his situation he can list the home for sale and have the lender consider a possible short sale which means he lists the home for sale at current market value and the lender reviews the offer once one is made to see if they can accept the short payoff in lieu of foreclosure. this affects the credit quite a bit it is reported as a 9 on credit which will affect the score as much as foreclosure but will not prevent him from getting another mortgage for as long as foreclosure will probably 2yrs vs 3-5 in foreclosure. he will also get a 1099a form in the mail for the difference the mtg company writes off in the short sale he needs to find out from his accountant how this will affect him personally it could put people in a bigger bind. Best bet if he can afford a reduced pmt is to apply for a modification its kinda like a refinance but its done free with no closing cost. appraised value is not a factor usually and credit don’t matter. its all based on current monthly housing expenses and gross and net monthly income. Good Luck
How do you reduce my mortgage payments, or stop them all together?
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Very odd situation he bought well before the buble so should not be so underwater unlewss he bought a place for 50k more than it was worth in the first place. He can walk away and get foreclosed on otherwise not much he can do.
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He could pay of the home. That would put an end to the mortgage payments.
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There is no way to "stop" the payments and still keep the property. I find it hard to believe that a property bought ten years ago for $130K is worth $44K now. Where are you getting your numbers?
References :
the best thing he can do if he is having problems making his payments is to call loss mitigation at his mortgage company and apply for hardship assistance. they may be able to qualify him for a modification depending on his financial situation. a modification will bring his act current if past due, lower his rate and possibly extend the loan term to lower the pmt as much as possible. if this is not a option with his situation he can list the home for sale and have the lender consider a possible short sale which means he lists the home for sale at current market value and the lender reviews the offer once one is made to see if they can accept the short payoff in lieu of foreclosure. this affects the credit quite a bit it is reported as a 9 on credit which will affect the score as much as foreclosure but will not prevent him from getting another mortgage for as long as foreclosure will probably 2yrs vs 3-5 in foreclosure. he will also get a 1099a form in the mail for the difference the mtg company writes off in the short sale he needs to find out from his accountant how this will affect him personally it could put people in a bigger bind. Best bet if he can afford a reduced pmt is to apply for a modification its kinda like a refinance but its done free with no closing cost. appraised value is not a factor usually and credit don’t matter. its all based on current monthly housing expenses and gross and net monthly income. Good Luck
References :
mortgage underwriter for 9yrs