Dear Pat,
We had a foreclosure on our block last year, and it took many months for the bank to take over the house and finally sell it. While it stood vacant several of us neighbors pitched in to shovel snow and mow the grass until new owners finally came. Now we hear that another neighbor is probably going to lose his home. I suppose we'll have to start mowing again. We're struggling to keep our payments up to date, and we wonder what these foreclosures are doing to our property value. What if we can't sell because we owe more than our house is worth? We don't want to be
---Stuck Here
We had a foreclosure on our block last year, and it took many months for the bank to take over the house and finally sell it. While it stood vacant several of us neighbors pitched in to shovel snow and mow the grass until new owners finally came. Now we hear that another neighbor is probably going to lose his home. I suppose we'll have to start mowing again. We're struggling to keep our payments up to date, and we wonder what these foreclosures are doing to our property value. What if we can't sell because we owe more than our house is worth? We don't want to be
---Stuck Here
Dear
Stuck,
It's sad to see how foreclosures can really affect homeowners
who live nearby, and how they have affected all of us by dragging down
values across the entire marketplace. Obviously the solution to the
problem is to dramatically reduce the number of foreclosures. I've heard
that 50% of the people who lose their homes to foreclosure never called
anyone to get help, unaware of valuable resources to help at-risk
homeowners with refinancing or loan modification. One such resource is
the Homeownership Center (HOC), a statewide non-profit organization that
oversees a network of mortgage support and foreclosure counselors.
Their easily navigable website is www.hocmn.org. Our local resource in
south Minneapolis is PRG, a non-profit that provides homebuyer education
and foreclosure prevention. The website is www.prginc.org. Counselors
can be reached at 612-721-7556. Ask for Stacey Bostwick at ext 21 or
Jennifer Lancour at ext 19. I urge anyone who is experiencing difficulty
with mortgage payments to contact these good people.
But if the foreclosure problem went away tomorrow, Stuck, you might still be experiencing the difficulty of owing more than your house is currently worth. Many millions of Americans are living "underwater," and it may take years for property values to recover sufficiently to allow them to sell their homes without loss. Longfellow homeowners sit on higher ground than owners in many other areas, but I sometimes have to bring the lifejackets to prospective sellers who bought at fair market prices as far back as five years ago. Indeed, many of us who bought or refinanced a home this decade are living uncomfortably close to the water's edge. So, assuming you are underwater. what is the lifejacket for you, Stuck? It may well be a complicated process called a "short sale," where the bank that holds your mortgage agrees (reluctantly) to settle for a less-than-full payoff on the loan at time of sale. This option can be much less costly for them than foreclosure, it spares the neighborhood the blight of an unattended house, and it has far less impact than foreclosure on the seller's credit rating. Details vary by situation and are too extensive to cover here, but a Realtor experienced in short sales can advise you on the necessary steps. Good luck!
But if the foreclosure problem went away tomorrow, Stuck, you might still be experiencing the difficulty of owing more than your house is currently worth. Many millions of Americans are living "underwater," and it may take years for property values to recover sufficiently to allow them to sell their homes without loss. Longfellow homeowners sit on higher ground than owners in many other areas, but I sometimes have to bring the lifejackets to prospective sellers who bought at fair market prices as far back as five years ago. Indeed, many of us who bought or refinanced a home this decade are living uncomfortably close to the water's edge. So, assuming you are underwater. what is the lifejacket for you, Stuck? It may well be a complicated process called a "short sale," where the bank that holds your mortgage agrees (reluctantly) to settle for a less-than-full payoff on the loan at time of sale. This option can be much less costly for them than foreclosure, it spares the neighborhood the blight of an unattended house, and it has far less impact than foreclosure on the seller's credit rating. Details vary by situation and are too extensive to cover here, but a Realtor experienced in short sales can advise you on the necessary steps. Good luck!
