A call came in this weekend from a client I worked with back in 2005. We had worked together on multiple real estate transactions for her in Southern California, and again on the purchase of her move up house in Ventura County.

Due to the timing of this latest transaction, she was caught - as was all of the equity and savings she transferred to purchase this house - in the economic spiral continuing to drag down some Southern California markets. The calls I was receiving from her earlier this year were pleas to tell her everything was going to be okay, and her life savings were not really gone. Like many people, the economic downturn following sharply behind this real estate market downturn has affected her income, too. Thank God, not to the level that has devastated her completely, but it sure has put a major crimp in her budget and a strain on her romantic relationship that it couldn't stand up to. In spite of this, she had the wherewithal to hang in there and see what she could do to hang on to her home.

Along come the Home Affordable Refinance and Modification programs! The Home Affordable Refinance Program didn't work for her, because appraised values have decreased so dramatically since when she paid $500,000 for her fixer upper home and began doctoring the home up to the vision she had for it. Although values still continued upward for a while, and the home improvements she so thoughtfully and carefully accomplished were doing wonders for this home, the appraisal her existing lender did recently came in at $340,000 due to the heavy volume of foreclosed homes in this market.

So, here's what she's getting with this modification of her existing loan term:
•-          2% interest rate for the first year, 3% interest rate the second year, 4% the third year and 5% for the remaining 37 years, which will get the monthly housing expense back to about 1/3 of her gross monthly income
•-          Initial monthly savings will be over $1,300
•-          Principal balance of roughly $30,000 is being forgiven
•-          The opportunity to stay in her home
•-          The vitality of hope that comes from knowing she is going to come out on the other side of these rough economic times

Know anyone who thinks they can't really get approved for the Home Affordable Refinance or Modification Programs? As frustrating as the process may seem, success is so worth it for the families who qualify! ...And, for their neighbors. Go to http://www.makinghomeaffordable.gov/ and see if this might be the solution for helping you stay in your home.

See you out there!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com