They want a principal reduction, but their lender won't agree to it. Lenders will drop your interest rate to 2% for five years. But, they are very reluctant to grant principal reductions. Let me explain why.
Click here to discover how other sellers successfully did a short sale and avoided foreclosure. http://columbusohshortsaleadvisors.com/
They are forced to a take huge write off on their books when they give you a principal reduction. No, this is not a "tax" write off.
If they give you a $300,000 principal reduction, then they have to take that directly off that year's earnings. That hurts earnings, which hurts the stock price, which in turn hurts the likelihood of the people at the top getting bonuses.
This makes principal reductions so rare. Instead, they like to reduce your payment down to the equivalent of a 400k principal amount. How?
By dropping the interest rate to 2% for 5 years. The lower interest rate reduces your payment as much as a principal reduction would have done.
The banks hope that you can limp along for five years until the economy recovers. Hopefully by then housing prices will recover, or you will be able to afford the higher payment after the interest rate reset.
But, many experts do not think the housing market will recover in 5 years, much less 10 years. This is why I recommend a short sale and renting to anyone who is upside down by 30%.
Now, you may be saying, "Of course you do recommend that. You get more sales that way." But, if that was true, then why would I give away free loan modifications kits to homeowners in foreclosure?
Click here to request a copy of my Loan Modification Guide that has the instructions you will need to get a loan modification approved with your bank. http://columbusohshortsaleadvisors.com/
I believe that most loan modification are a temporary band-aid that doesn't solve the underlying problem. Most people that short sale are already suffering and their credit has been hurt by a pending foreclosure.
What if they accept the loan mod offer and can't afford the payment reset in 5 years? They may have to stop paying, hurt their credit again, and apply for another loan modification.
Why not wipe out the upside down debt while your credit is already damaged? Agree? Disagree? Please put your comments in the comments section below. Thinking about a short sale?
I can help you short sale your property and get back on your feet. Send me an e-mail at robin.lemmons@kingthompson.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 614-741-2495.
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here. http://columbusohshortsaleadvisors.com/
Thinking about a loan modification? Our Columbus loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy. http://columbusohshortsaleadvisors.com/
Thanks for reading this, Robin Lemmons.
Rick & Robin Lemmons is a Real Estate Team at Coldwell Banker King Thompson.
Phone: 614-741-2495
Email: robin.lemmons@kingthompson.com
A Zest For The Best
View My homes for sale at www.rickandrobin.com.
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Important Notice
Rick & Robin Lemmons, Coldwell Banker King Thompson, and the Stop Foreclosure Institute are not affiliated in any way, shape, or form with the government. Our services have not been reviewed or endorsed by the government or your lender. Most lenders willingly work with agents on short sales. Why?
Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.
However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.
We do not recommend that you stop paying your mortgage, because this will cause damage to your credit and could cause you to lose your home. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.
This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.
You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.
The views expressed here are Robin's personal views and do not reflect the views of Coldwell Banker King Thompson.
This information on How A Columbus Short Sale Will Reduce Your Loan Balance Faster Than A Loan Modification is provided as a courtesy to our viewers to help them make informed decisions.
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