Help for Homeowners

Dear Sue,

My husband and I have been retired for the last five years. Our income has been a combination of his pension and investments in the stock market. Unfortunately we invested heavily (and we thought conservatively) in some of the so- called blue chip stocks that can now be purchased with pocket change.

We have always been responsible people. Some even call us conservative. We have paid our bills on time and always paid the mortgage first!

Two years ago we decided to take equity out of our home for a much needed remodel. It didn’t seem like such a big risk at the time because we had plenty of equity. We also thought that the improvements would just add to the value of our home.

Needless to say our retirement income has diminished considerably and so has the value of our home. We are now under water and it is very difficult to make our house payment.

We are between a rock and a hard spot even though we always did our best to make responsible financial decisions. We are getting close to not being able to make our payments and we don’t have enough equity to sell. Ideally we would like to stay in our home. Where do people like us go for help?

Desperate Diane

Dear Diane,

Unfortunately many people share your predicament to one degree or another. Many of those people felt that they too were making responsible financial decisions.

Fortunately the current administrations new plan for helping homeowners may include help for you. The plan is specifically designed to allow existing homeowners to keep their homes by making mortgage payments affordable

I recommend going to FinancialStability.gov. If you answer yes to the four qualifying questions you may qualify for a no equity refinance. With the current interest rates this can significantly reduce your monthly payments.

If you have a “no” answer to any one of the four questions, you may be eligible for a loan modification. Under the new plan you don’t have to be behind in your monthly payments to qualify.

Loan modifications include adjusting the payment, interest rate, loan term and in some cases reducing the principal balance.

If you do not qualify for the affordable refinance or loan modification, you have other options available to you. They include forbearance, which is an agreement to pay only a portion of your regular payment or no payment at all for a specific period of time based on your current financial situation. At the end of the time period you will begin making the regular payments as well as an additional amount to pay off the past due amount.

There is a repayment plan and special mortgage relief assistance for active duty military service members.

If the no equity refinance and loan modification options fail, a pre foreclosure or “short Sale” is an option. That is when the lender agrees to take less than is owed.

If a short sale doesn’t happen in a timely manner, a deed-in-lieu of foreclosure can be a possibility. This is when a mortgage servicer agrees to have you voluntarily transfer the deed to the property to them to help avoid the impact of a foreclosure on your credit rating.

If you need urgent help contact the homeowners HOPE hotline (888)-995-HOPE. It could be a matter of good home $$’s and Sense.