Principle Write Down, Fo' Reals?

By
Managing Real Estate Broker with Arizona Real Estate Options

Ocwen Financial Corp. is launching a new loan modification program called Shared Appreciation Modification. Underwater borrowers who qualify will have their principle reduced to 95% of market value. In return for remaining current on their new reduced payment program homeowners agree to "share" the home's future equity. The amount written down (the debt on the negative equity portion) is forgiven in one-third increments over the first 3 year period and when the house is later refinanced or sold the borrower will be required to share 25% of the appreciation with the investor. 

Laura Higginbotham Arizona Realtor

This program has been in trial mode since 2010 and experts are optimistic this may be the best course of action for banks to curtail large numbers of underwater and defaulting mortgages. An especially important move in the midst of more and more homeowners choosing to walk away because of negative equity. Time will tell if other banks will follow suit with similar programs. These days major banks and government loan modification programs success rates are at best laughable. Talk to anyone who has attemted to work with their bank. After months of hassle and heartache homeowner frustration is so high many feel like giving up and walking away. So Kudos to Ocwen for helping borrowers avoid foreclosure by creating a win-win situation for everyone.

After all, isn't the BEST thing for families to keep their homes?

Interested in finding out what OPTIONS are out there for you?  There are even special programs designed for people who are current on the payments. Contact me today!


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Rainmaker
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Chandler Real Estate Liz Harris, MBA
Liz Harris Realty - Chandler, AZ
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I have heard of this before... I imagine it works if someone is sure that they'll be in their home for a while.

Jul 28, 2011 01:35 PM #1
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Laura Higginbotham

Broker/Real Estate Consultant, Mesa, Arizona Home
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