Tweet

The Underwater Mortgage and the Cash-Strapped Homeowner

Guest post by: Bud Gragg

Article Overview: If the recession already has you strapped for cash, the last thing you want to find out is that you're one of the 24% of homeowners who are stuck with an underwater mortgage. After all, your house was supposed to be a good investment against hard times, wasn't it? You were supposed to at least be able to count on proceeds from the sale of your house to help you have a decent retirement.

The Underwater Mortgage and the Cash-Strapped Homeowner

If the recession already has you strapped for cash, the last thing you want to find out is that you're one of the 24% of homeowners who are stuck with an underwater mortgage.

After all, your house was supposed to be a good investment against hard times, wasn't it? You were supposed to at least be able to count on proceeds from the sale of your house to help you have a decent retirement.

But if your job is gone and your mortgage is under water, suddenly things just don't look as good as they did a year or two ago.

We're sorry you're going through this. We know what it's like! Kristin and I are both Realtors, and we thought we had our financial house pretty much in order. But when the real estate market bottomed out in 2007, suddenly our business lines stopped ringing.

And suddenly we were sitting on top of a lot of underwater mortgages because we'd invested heavily in real estate in addition to buying our own dream house.

Now, we aren't going to tell you what to do with your underwater mortgage although we do offer a lot of fact-based advice in our e-book and all over this website. In this article though, we'd like to tell you what we decided to do with our underwater mortgages, and why.

We short sold most of them and the banks forced us to foreclose on a couple of them. Yes, we did this willingly and let me tell you why:

One night I was sitting paying bills and realized that while we had no real income coming in each month, we had tens of thousands of dollars going out

in mortgages! That's when I had to take a hard look at our situation.

There was little hope—really no hope—that the real estate market would come back in time to keep us from being penniless.

Because of the recession, the properties we'd invested in were all underwater—if we stayed with the mortgages, we'd never get our investments back. Not even close.

Suddenly, all of “the rules” we're all taught to live by flashed in my head, and I realized something very important: If I kept paying all those mortgages, my family would end up penniless and we'd still end up in foreclosure.

But if we took the reins and decided how and when to get out from under those properties, we'd be able to come out of the process with money in the bank!

Now, Kristin and I have 2 children. We had a responsibility to make sure our kids did not suffer because of our business decisions. But even if it's just you and your spouse, or just you, are you any less responsible for yourself? Why would you want to let a mistaken investment tie you to a mortgage that is going to trash your financial future?

You took a chance, even though none of us honestly believed we were taking a chance when we took out those mortgages. Your mortgage lender took a chance, too.

Which one of you do you think can afford to take this loss—you or the lender?

Yes, there is a moral dimension to this situation. And here's what Kristin and I think that moral dimension is: The financial institutions helped us get into this situation. But they haven't suffered a bit. Kristin and I don't think that people like us should have to take all of the punishment when the people who created, wrote, and sold these mortgages are still getting hefty bonuses.

Leaving our underwater mortgages protected our financial future and kept our kids from having to grow up in poverty or near-poverty. You may be facing the same kind of decision with your underwater mortgage. No matter what you decide, Kristin and I, and this website, are here for you!

Related Articles
  More People Walking Away from Underwater Mortgages
  Coming Soon to Your Neighborhood: Falling Home Values Mean More Underwater Mortgages
  Don’t Be Fooled Again-Avoid Underwater Mortgage Advice Scams
  Where to Look for Help for Your Underwater Mortgage
  Short Sale Training Boot Camp for the Underwater Mortgage Homeowner
  Tsunami 2012: Why More of Us Will Find Ourselves with Underwater Mortgages
  Your Life or Your House: Key Questions to Ask Yourself If You’re Facing an Underwater Mortgage
  Need Underwater Mortgage Help? Here’s Where to Turn
  Underwater Mortgage Loan Modification: Just a Band-Aid?
  What is an Underwater Mortgage?
  Short Sale? Foreclosure? Options for the Underwater Mortgage Holder
  The Underwater Mortgage: What to Expect in Pre-Foreclosure-and Beyond
  LTV: The Key to the Underwater Mortgage
  The Most Common Underwater Mortgage Mistakes-And How to Avoid Them
  Rebuilding Your Credit after Foreclosure on an Underwater Mortgage
  Underwater Mortgage Foreclosure Options- Yes, You Have Them and Here’s What They Are
  How to do a Short Sale on Your Underwater Mortgage and Avoid Foreclosure
  Dealing with the Bank on Your Underwater Mortgage Short Sale
  Underwater Mortgage? Here’s What to Do
  Underwater Mortgage Solutions: What Is a Short Sale?

Article Tags: bank short sale, home short sales, house short sale, how to do a short sale, how to short sale, mortgage short sale, short sale, short sale definition, short sale foreclosure, short sale help, short sale information, short sale process, short sale training, what is short sale
Referred by: http://www.meetkarennewman.com/



Related Forum Posts
Re: Hi - Thanks guys! I have been helping Real Estate and Mortgage professionals generate leads from the Internet for 5 years now!. I'd be glad to exchange some ideas. Have a great day=)
Time to get rich in real estate? - Another thing I'd do if I had a million bucks...or more... would be to start buying up distressed real estate. Sounds ghoulish, I know, but prices are down so much now that anyone who can afford to buy houses and hold onto them until the market "corrects" itself, could make a bundle in a few years. I've been reading a great deal about the current mortgage crisis, and I've got to say that whatever genius came up with the Adjustable Rate Mortgage - and worse, actually persuaded people to buy using it - deserves to be boiled in his own oil and buried with a spring of holly through his heart! What a ridiculous thing - just asking for trouble!
Enhancing your Mortgage Marketing Business - Getting the most up to date information on online marketing methods that are actually helpful for mortgage brokers. We all know that technology is changing the way that consumers decide who they are going to do business with. What a lot of mortgage brokers don't understand is the massive impact technology has on their business. For instance, did you know that Google has developed a tool so that people can compare loans from all the major lenders online? Then they give them the contact information of Mortgage Brokers that are close to them? This is a massive new lead source that most mortgage brokers have no idea exists. You can get information about the service directly from Google. Internet marketing tools can highly provide best results to get leads for your mortgage marketing business.
Re: Time to get rich in real estate? - [quote="OmnivoreInk":397sdq49]Another thing I'd do if I had a million bucks...or more... would be to start buying up distressed real estate. Sounds ghoulish, I know, but prices are down so much now that anyone who can afford to buy houses and hold onto them until the market "corrects" itself, could make a bundle in a few years. I've been reading a great deal about the current mortgage crisis, and I've got to say that whatever genius came up with the Adjustable Rate Mortgage - and worse, actually persuaded people to buy using it - deserves to be boiled in his own oil and buried with a spring of holly through his heart! What a ridiculous thing - just asking for trouble![/quote:397sdq49] I've gotten into a few loans that I didn't check the terms as thoroughly as I should have, but its hard to imagine someone signing deed of trust papers for that amount of money for 30 or so years and not understanding the terms. I would never want an adjustable mortgage - even before these latest problems, the financial system is unpredictable. Things can change A LOT in 30 years - look what happened in 4 or 5 years. Chris
How Can I Make Money Out of This Need? - I came across an interesting piece of news while surfing the web today. A site called Mortgage Loan Place had this paragrpah: If you bought your home after Sept. 1, 1983 with a FHA loan, chances are you had to purchase mortgage insurance. The FHA was supposed to refund that insurance back to you if you made all of your payments and have paid off your mortgage. The Department of Housing and Urban Development (HUD) says that approximately 30 percent of those refunds never get claimed. $450 million waiting to be claimed And there is a search box there where you input a last name, and a list of all the people with that last name who are owed money by the FHA comes up. Most of those people seem to be owed only a couple of hundred dollars, but some are owed over a thousand dollars. And the records cover everybody from 1983 onward... So I'm wondering... is there any point in contacting these people (their addresses are given), telling them that they've forgotten to claim this refund? The thing is... that would be the good samaritan thing to do... but I'm wondering if there's any way to monetize the service. All I can do is tell the people they're due a refund - they just have to apply for it, so it's not like I'd actually be providing any kind of service, except one of information dissemination. Anyone have any thoughts?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Adapting to Technology and the Internet

3 Pointers to Recruiting and Retaining Good Staff

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.