Many current homeowners have gone through an adjustment to their home equity since the real estate market began its decline 5 years ago. The recession has found more homeowners unemployed and/or unable to make their mortgage payments.
Good news! There is a website established by HUD (Housing and Urban Development) that provide some eligibility questions that homeowners can answer to see if they qualify for a loan modification.
They also have a “Payment Reduction Estimator” calculator that can help a homeowner see what their monthly payment may be reduced to if they qualify for a loan modification.
They list some modification programs that lower mortgage payments more than $500 each month. It’s worth exploring if there is a chance that one can stay in their home.
If after one works through this preliminary process to see if they qualify for a home loan modification and find out for some reason they are not eligible for a government loan modification, they should still contact their lender to see if there is any other help. Proceeding with a short sale would then be the next step, and as a last resort, if a short sale is not approved, then and only then, is a foreclosure the first step to starting over and re-establishing credit for the future.
Hopefully, more homeowners can instead, find a way to stay in their home with government loan modifications.