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Mortgage Fearbuster 13

Posted by  on Aug 05, 2010
 

Q: I'm in deep water on my house--my mortgage is about $200,000, and my place is only worth $150,000. My buddy at work mentioned doing a short payoff, but I don't want to move. What can we do?

A: Unfortunately, unless you have a financial hardship that makes it difficult to make your mortgage payments, you may not have much luck. Check into government-sponsored foreclosure prevention programs including the Home Affordable Modification Program (HAMP), and Home Affordable Refinance Program (HARP). There is also a possibility that your lender may (repeat, may) agree to a "short refinance" if you can qualify for refinancing to an FHA loan. Contact FHA-approved lenders or a HUD-approved housing counselor for more information.

Q: I bought a condo a few years ago, and it's too small for my needs, as it's a studio and I'm getting married in a few months. I can't sell the place; I owe more than its worth. My finance tells me to "just walk away" as I plan to move into his home once we're married. What should I do?

A: "Just walking away" may sound like a cool idea until reality and your damaged credit catches up with you. If your lender forecloses on your mortgage, you'll likely be unable to qualify for a mortgage for three years after the foreclosure is completed; foreclosure is also a serious blight on your credit scores. You could consider renting your condo; local colleges often post local rental lists for students.

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