Should I Keep My Home Or Surrender It?
Are you a homeowner in Fort Myers who has lost a job or lost some of your household income? Have you been unable to make your mortgage payment this month? If so, you may be facing the very difficult decision that so many homeowners in Florida are facing: should I keep this home? At Dellutri Law Group, we are seeing homeowners coming in the doors daily agonizing over this decision.
Trying to decide whether to try to keep a home through modification when you owe 2-3 times its value is a very personal one; and in order to make the best decision for yourself and your family, it’s important to consider many different factors:
- Recent studies are showing that foreclosures are on the rise again, and a report on Dow Jones newswire shows analysts predicting that home prices will continue to decline again this year. “Home prices are expected to decline again with risk of another 50% down to get house prices back to levels of 1999 / 2000”, says Richard Henry Suttmeier on Forbes.com. This is a very startling and scary prediction, but if it comes true, this could very well mean additional declines in home prices in Lee County in the near future.
Experts are forecasting about 1,482,279 new foreclosure actions from 2009-2012. Source: Center for Responsible Lending.
- While many people are qualifying for a HAMP trial period modification, very few are getting a permanent loan modification. The April 2010 figures released by HAMP was that out of the 1,214,085 people who qualified for a HAMP trial period loan modification, only 299,092 people received a permanent loan modification which enabled them to keep their home.
- The vast majority of permanent loan modifications that we are still seeing today involve a very slight reduction of the old monthly mortgage payment, usually about $100.00 or less per month. Lenders are typically not reducing principal balances of loans, but they may reduce interest rates and/or extend the terms of a mortgage in order to reduce the monthly payment as indicated above, and only if you qualify based on your current income.
- Under Florida law, if you lose a home in foreclosure, the lender has the right to pursue a deficiency judgment against you if the value of the home is less than what you owe on the Note. There can also be tax consequences if the lender forgives this deficiency, especially if the home is an investment property. The laws in this area are complex, and we highly advise that before you stop making mortgage payments, go see a qualified attorney and possibly a tax professional to advise you of your rights and responsibilities in this area.
These are just a few factors to keep in mind in trying to make this decision. If you’d like to discuss your options in detail, please take advantage of our free consultations and get some piece of mind during these difficult times. You are not alone, let us help you.
This blog was written by Shannon Houk, Esq. with The Dellutri Law Group, P.A. Ms. Houk handles foreclosure defense cases and mortgage modifications.
