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Banks Discover Ground-Breaking Solutions to Get Underwater Homeowners To Stay

By
Real Estate Agent with RE/MAX

Oppose to what some may assume, many financial institutions are eager to keep homeowners in their homes, not just than push them away, at least in certain instances.

As a result, the Loan Value Group which is private company in New Jersey that
team up with lenders around the country to prevent homeowners who are underwater on their mortgage from leaving their homes.

According to The Boston Globe, homeowners can apply to be a part of the company’s Responsible Homeowners Reward program that pays select candidates around 10% of their mortgage as an incentive to stay in their homes. On the other hand, lenders can pay a fee to register for the program and chose the homeowners who the company wants to give a reward for staying put. Basically, the Loan Value Group serves as the middleman for the two parties.

Loan Value Group states, there are two kinds of mortgage defaults: those that happen for the reason that the homeowner can no longer afford payments and those that happen because the value of the home is actually of no value than the mortgage that makes continued payments seem like a bad investment.

As of the moment, about 14 million homeowners in this country who owe more money on their mortgage than their home is worth, and some guess this number may reach 20 million by the end of next year. On top of that, last month a survey from the Pew Research Group establish that more than third of Americans consider it is acceptable to walk away from a mortgage, even if you can afford making the payments.

If you are someone with a property that is 25% underwater and on the peak of a strategic default, having someone pay you 10% of your mortgage when the home is sold certainly won’t increase your equity back out of the red. It debatably accomplishes two things that are more basic thus it opens up of a kind of conversation between the lender and borrower to understand what to do with the property and it provides the desperate homeowner a positive focus. And the system may aid them to help themselves by continuing to make payments thus having credit scores safe and sound.

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