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In today’s economy, despite things improving, we are still seeing countless Americans dealing with the aftereffects of the housing market crisis from just five years ago. What that means for many people is that they continue to struggle with keeping up on their mortgages.
Today,
we want to talk about knowing and understanding the options that may be out
there for you – and realizing before it’s too late that you can seek alternatives
to foreclosure.
During a
discussion with Attorney Michelle Adams of the Law Offices of Jill Pogach Michaels in Rothwell Maryland, a
number of options and some very valuable insight came up with regard to the
homeowners trying to deal with their homeownership crises. Specializing in
short sales, settlements and loan modifications, the law firm is often met with
frustrating circumstances that might have been avoided had their clients been
informed properly ahead of time of their options.
Particularly
at a time when homeowners approaching and crossing the retirement age are
facing challenges in their real estate endeavors, Michelle urges that consumers
be educated as much as possible about how to handle their upside down mortgage
or financial strife leading to an underwater property.
Her very
first and most important advice is for homeowners to never tap into their retirement funds to be able to keep up
with their mortgages. This will only compound the problem. Further, without
knowing the consequences of refinancing their property, many people end up
unable to seek relief from government programs designed to assist them in the
first place.
Accessing
Retirement Funds Will Backfire
Addressing
homeowners’ retirement funds first, it is critical for people that are 55 years
and older to reassess their living arrangements rather than use their
retirement fund to keep up on their mortgage. Not only will they hardly be able
to make much impact on the loan but also the damage to their retirement fund
will almost be irreparable.
Conversely,
they should consult with a real estate agent and also an attorney to evaluate
their loan modification and/or short sale options. There is a very good chance
they may be able to sell their property rather than face foreclosure and be
left with nothing to retire.
Refinancing Will Undo Any
Chance of Government Relief
A
program that is designed to assist homeowners struggling to deal with a
property valued less than what is owed on it can be just the thing to help them
stay afloat. The HAFA program is one of many that
has helped millions of Americans. However in order to qualify the loan had to
have originated prior to January 1, 2009. The moment a refinance is done on a
property, the clock restarts and the homeowner will no longer be eligible for
the Home Affordable Foreclosure Alternatives program.
Important
to Assess Your Situation Before Taking Any Steps
Before
moving ahead with anything, it is absolutely imperative that homeowners in
difficult situations of property distress evaluate their situation and look at
the bigger picture. Consider short, medium and long-term plans. Review where
you are right now and then look at your earnings. What percentage is the
mortgage? What happens upon retirement?
A very
important component of knowing what to do next is to understand your goals and
be able to identify the areas where you can engage in alternatives. A meeting
with an attorney will provide some perspective and direction as to what to do
next. Maybe filing for bankruptcy is not the answer. It could be that you may
be able to settle through arbitration. Depending on whether or not your state
is a judicial or non-judicial
state, you
may have limited options and may need to take more immediate action.
Through
it all, it is important to keep in mind that the closer you get to retirement the
less time you will have to recover from the situation. So before it becomes too
late, even if you are current on your
mortgage payments – contact us today for a conversation about your
options.
Marc
Cormier: 703.564.4026 or 301.660.6272 or www.help2ownahome.com
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