The unfortunate answer to that question is "YES" we are still in a depressed market here in Mohave County, AZ. It is a great time for Buyers and Investors to make their first home purchase or investment property purchases but is very hard on the average home owner who needs to relocate for a job transfer, can't refinance because their home won't appraise for what they owe, has suffered a job loss and can no longer afford the home but due to the market prices can not sell for enough to pay off his mortgage.
These are troubling times for most. Job loss is at all time highs. The highest we as a country have seen since the great depression.
Credit card interest rates have gone up and credit limits have gone down. Adjustable rate mortgages from 2004 and 2005 are adjusting and payments are going up. The cost of living is still high while incomes are being cut in half or in the case of a single wage earner cut all together. Unemployment insurance fails to cover the bills accumulated through a better time.
Foreclosure is not the answer....
Many homeowners have walked away from their homes from a feeling of hopelessness and a lack of understanding of any other options. The amount of foreclosures that hit the market in 2008 and 2009 caused a huge drop in marketprices which put the rest of the homeowners who purchased or took out equity in 2004 and 2005 upside down in their home. This made it impossible to refinance those adjustable rate mortgages that could sometimes double the mortgage payment. So what do you do in this situation? Walk away? Deed in Lieu? Probably not the best choice. Foreclosure can follow you around for 5 to 7 years and a deed in lieu has the same result. The government has passed new legislation to make modification of your mortgage a real possibility and if you are trying to save your home I believe this should always be your first avenue to avoid foreclosure.
What if you have lost your job or had another tragedy which have caused you not to qualify for a Modification? Then the other option you have is to sell the home Short.
SHORT SALE DEFINED
A Short Sale is a negotiation between you and your bank to accept a less then owed amount to satisfy your mortgage obligation. Many banks are now being pro active in working with borrowers to either modify or accept the short sale. Some banks are even reporting on the credit report that the loan was satisfied in full. This is not ordinary and depends on the lender. A short sale usually will not effect your score as bad as the foreclosure depending upon your current credit history.
You should always work with a qualified and experienced professional to help you market and negotiate your short sale. You should always speak with a tax professional about any tax consequences that might occur. Take a deep breath. You have options!
Angela N Kidd Realtor CDPE
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