We hope you and your families have been well and you have been having a wonderful holiday season.

This is the season that families and friends tend to gather in their homes to enjoy the joyful festivities of the season. Unfortunately, this year has been extra tough for some people to enjoy their homes because of mounting concerns about how they are going to make their next mortgage payment. We do not want this fear and uncertainty stealing any joy out of anyone’s holiday season.

Our goal is to provide our friends, family members and clients with the best options and information available. It’s important you know there are solutions available to you, and we wanted to drop a quick note to let you know how we can help.

 

- Refinance Your Current Mortgage

This is a very timely option to consider. The Fed just recently announced that it is going to buy 600 billion dollars worth of Mortgage Backed Securities. The direct impact of this is that rates have gone down dramatically and 30 year conventional mortgage rates are now in the mid 5% range!

In the past when we have seen rates drop this dramatically, they have gone back up that same day. Give us a call or email now so we can help you save on your mortgage payment. 

 

- Loan Modification

With a loan modification, the only things that change for you, the homeowner, are the terms on your mortgage. This allows you to remain in your home while making a more affordable payment.

Banks are being very cooperative with loan modifications because it is a much better option for the bank than “short sales” or foreclosures. In many cases, the bank would prefer you to stay in the home and make reduced or modified payments over foreclosing on the home or selling it at a loss.

There have been great results that have come out of loan modification thus far, however you need to act now…Once the waves of foreclosures begin to subside, so will the banking industry’s cooperation in modifying loans.

 

- Short Sale

For many people that could be facing foreclosure or are upside down on their mortgage, a short sale is a viable option to consider. In the event of a short sale, the owner sells the home at a price that is less than what is owed on the mortgage, and the bank takes a loss on the loan. For the bank, a short sale is often less costly than foreclosing on the home due to extensive legal fees involved with a foreclosure and the unlikely chance of getting a fair price when trying to sell the property at a foreclosure auction.

Just recently, we successfully negotiated a short sale for one of our clients and we thought sharing their example would be helpful. The homeowners had an outstanding loan balance of $390k and they were 8 months behind on their mortgage payments. The home sold for $301k and the bank ended up taking a $140k loss on the loan. The homeowners were not responsible for paying back any of the $140k that the bank lost, and rather than having a foreclosure on their credit (which stays there for 7 years) a short sale is recorded on your credit as “the loan has been satisfied.”

In the past, this $140k would have been considered “phantom income” and would be subject to income tax. However earlier this year, the Bush administration passed a law to help troubled home owners which stated that any short fall on the repayment of a loan in the event of a short sale would not be subject to income tax.

Please contact us immediately if you think a short sale for your King County home may be an option you should be considering. It is imperative that we get involved as soon as possible.