Sellers, if "Help" comes with a bill.... watch out!

I've been receiving a lot of calls lately from homeowners and sellers who have gotten behind on their mortgage payments and are looking for help. While I highly recommend gathering as much information as you can, as quickly as possible, be particularly wary of persons and companies that offer an easy solution with, of course, cash paid upfront.

While no two household's difficulties are the same, there is one piece of advise that works in all situations. Gather all the information you can, decide what is the best solution for you, act quickly and under no circumstances, pay for services or promises to "fix" your situation. The last thing anyone who is experiencing cash flow problems needs, is to place their hard earned money in the hands of someone who can easily do more harm than good. Especially at a time when you need your money the most.

Generally, these persons or companies will say they can arrange to have your mortgage restructured, lowing the payments to keep you in your home. This action is best done by YOU, the homeowner. Believe me, no one carries a magic wand or has an "in" with your mortgage company. If it sounds too easy.... more than likely....it is!

It is important to remember that the mortgage company really doesn't want to foreclose on your home. However, and perhaps more importantly, the people you will be dealing with at your mortgage company are human. Worst of all, an overworked human. Several "workout" departments are now operating 24 hours a day. The key here for the homeowner, is persistence. You must be active and continually work with the lender to see what, if anything, can be done in your particular situation. Remember that many lenders are working with established guidelines. When it comes to working out a restructure, if you do not fit in the box, they will not make an exception, regardless of what has happened.

If it has been determined that they can restructure your payments, respond to your lender quickly. More than likely you will have several forms to complete, documents to sign and documentation to provide. The old saying of people like working with those they like, does apply here. If you are timely in your response, your file worker can see an end to your case and will be anxious to move it along to complete the file. So help them out. If you are one of the few who can be benefited from a restructure, act quickly, for yourself and the hundreds of others who also need your file workers time.

If, after several calls and speaking with different persons within your lender's servicing department, you realize they cannot assist you, what to do next? Again, know your options. If you are facing a foreclosure, how much time do you have? If a Notice of Trustee Sale has been posted, that is the time limit! If you have your property for sale, sit down with your Real Estate Broker and fully understand your competition. In today's market, if the home is not priced right, it will not sell. Quickly consider making a price correction. In the game of "Beat the Bank", the goal is to have a qualified buyer well in advance of the Trustee Sale. If you are concerned about losing equity, in an incorrectly priced home, the equity is already gone.

If by reducing your asking price, you now owe more then the home will sell for, consider a short sale. Ask you Real Estate Broker if this is a transaction in which they are experienced. Short sale transactions are more labor intensive and the commission to the agent is not guaranteed. While your Broker may like you as a client, they may prefer not to work on short sales. In considering a short sale the key is to price aggressively to attract the buyers to your home, but not so aggressively that you lender will refuse the offer. Once a buyer has made an offer, the seller will sign the purchase contract accepting the offer, then it's up to your lender for final approval of the short sale. It's important to note that not all situations will qualify for a short sale approval from your lender. If the homeowner has the means to make the payments and to also pay the balance of the loan after the home is sold, most likely a short sale will meet with some difficulty in being approved. The homeowner must again complete a series of forms and supply documentation. If the homeowner can demonstrate a hardship in making the payments, the lender would prefer to have the home sold via a short sale rather than foreclose. One last note here if you are considering a short sale. If you don't have a good qualified tax accountant, get one. You will want to discuss your situation with your tax accountant prior to making any firm plans in order to fully understand the tax implications of your decision.

What if your home still won't sell and the Trustee Sale date is looming? Chances are that the highest bidder on your home at the trustee sale, will be your lender. Chances are that you will need to remove yourself from the home. If this happens, make plans to move at your pace prior to the date. Leave the home undamaged, which may sound strange but, many people who find themselves having to move are understandablely angry at their lender. Damaging the home will not help the situation and it can cause you a new set of problems. While it is understandable to be angry, remember you are not alone. Thousands and thousands of Americans are facing the same problems and together we must work to see that this never happens again.

If you are experiencing difficulties in making your mortgage payments, the time to act is now. Call your lender and meet with an experienced Real Estate Broker today. We want to keep you in your home. Perhaps together, we can do that.