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Avoid Foreclosures


If you are struggling to make mortgage payments, you have two options. First, you can go back your lender and renegotiate the terms of loan. With the initiation of the Homeowner Affordability and Stability Plan, part of the recent stimulus bill, homeowners have the option of refinancing even if their loan to value ratio is above 80%, the current guideline for conforming loans. There are also options for those that have had their income reduced. The new plan allows for government and investment banks to work together to lower interest rates on loans and thus lower payments for those with either reduced income or reduced equity in their homes. To find out more and see if you qualify, go to

If you do not qualify for these new programs, either because your income is now too low or you are too upside down on your home (you owe considerably more than what your home is worth), you may qualify for a short sale. This is when the bank is shorted what they are due according to the mortgage terms. It does reduce your credit score but looks better than walking away from the home and allowing it to go to foreclosure. According to RC Thielemann, of Capital Mortgage, a short sale will drop your credit score about 50-100 points, where a foreclosure will drop your score 300 points and make it very difficult for you to purchase again. The added benefit is that you have a place to live while you are selling your home. If you think this is an option for you or someone you know, please call us. We don’t want to see anyone lose their home but if they must, this is a better way to do it. Check our Frequently Asked Questions for more information on short sales.

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