Continued from page C28
new Home Affordable Refinance Program (known as HARP 2.0). You can find out more through MakingHomeAffordable.gov or by calling a HUD-certified housing counselor, at 888-995-HOPE.
Recently, the banks have been encouraged to re-evaluate their borrowers’ loans and allow them to refinance those loans under certain conditions even if the equity in their homes is below what they owe their lenders.
The departments of the Treasury and Housing and Urban Development have sponsored plans to enable borrowers to stay in their homes.
In the past, federal mortgage relief plans have helped some but not the majority of borrowers. As new rules are being written for the program, you may want to contact your bank again and see if you meet the criteria for refinancing your loan under HARP 2.0.
Homeowners who are severely underwater may find their lenders more receptive to the idea starting in the first quarter of 2012.
You may love your house, but you shouldn’t risk your financial future on that emotion. It may simply be unaffordable, given your loss in income. If you don’ qualify for a refinance plan or if the refinance plan can’t meet your financial goals, you may need to consider selling your home — even if you sell it for less than you owe the lender.
If you are able to short sell your home and get the lender to agree to the sale, you will at least get out from under the debt you owe on the home, especially if the lender waives the right to collect on the deficiency owed upon the sale of the home (that is, on the difference between the proceeds from the sale and the amount you owe on the mortgage).
Once you are out from under this property, you can find a living arrangement that substantially reduces your monthly housing expenses and allows you to pay off your credit card debt, save for your kids’ education and even save for your retirement.
Ilyce R. Glink’s latest book is “Buy, Close, Move In!” Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Glink and Tamkin through Glink’s website, www.thinkglink.com.
