New Thinking Works For Borrowers And Lenders

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This week, a military officer in Virginia called for advice on his property. He was being transferred to Texas, needed to sell his home, and his loan balance was $60,000 more than what his house was worth.

We laid out a series of options and, of course, recommended that he seek professional guidance from legal and accounting professionals.

Fortunately, he is located near a military base where there continues to be a strong rental market.

He decided to rent his home to avoid a short sale (a short sale is when the property is being sold for less than the mortgage balance) and keep his credit unblemished.

Unfortunately, until the market turns around and he is able to sell his property, he will have to make up a monthly deficit of $1,000. The $1,000 is the difference between the rental income and his mortgage payment.

Our small corner of the world has not been impacted as severely by foreclosures and short sales as other parts of the country. We have, however, started to see a rise even in the Rim Country.

According to Dale Gonzalez of Pioneer Title Agency, for the period of Aug. 15 through Sept. 15, 16 Rim Country properties were noticed for foreclosure.

For the period of Oct. 15 through Nov. 15, 21 additional properties were noticed for foreclosure, which is an increase of 30-plus percent. The properties that are being affected range from the most affordable to some of the most affluent.

What should you do if you find yourself in the regrettable predicament of being unable to make your mortgage payment? As described above, get professional financial and legal advice.

A common error that is made is that people do not get involved or seek advice to work out a solution until it is too late.

The situation with lenders and banks is changing rapidly. Many lenders have softened their positions on working out a payment schedule to keep people in their homes with a payment they can afford until our economy begins to right itself.

This new thinking of wanting to work with borrowers is to the benefit of the homeowner and the lender. The lender maintains an income stream while the homeowner remains in his or her home and does not have the severe impact to his or her credit rating that would be caused by a short sale or foreclosure.

Ray Pugel is a designated broker for Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.

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