Although my area of expertise is helping Sacramento’s financially struggling homeowners avoid foreclosure by using short sales I do get a number of requests each week asking how to “save my house.” 

Contact your current lender is always my first piece of advice to homeowners who are having problems making their monthly payments but want to stay in the house.  Tell them you are not going to be able to continue to make the payments and ask them if they will consider a loan modification.  Most lenders now have departments set up specifically to help you.  They want to keep your mortgage and want to avoid having to foreclose so they have an incentive to find ways to help.

Unfortunately, even with the built in incentives and some even backed up with federal bail-out money the results are not always positive.  The reports I get back from clients who have pursued this route have not been very positive but it is the first place to start.   

Alternative 1

There is a program which rolled out a few weeks ago called the Home Affordable Program but more commonly referred to as the 105 percent loans.  This program is designed to help home owners who currently have a Fannie Mae or Freddie Mac loan.  This program is designed to finance up to 105 percent of your home’s value, there is no requirement for mortgage insurance and rates are very attractive and it is relatively easy to qualify. 

How do you know if your loan is a Fannie or Freddie loan? There are two web sites to determine if the borrower has a Freddie or a Fannie loan.  They are

https://ww3.freddiemac.com/corporate/  and http://loanlookup.fanniemae.com/loanlookup/

Alternative 2

There is help out there for homeowners who do not have Fannie/Freddie specific loans.  This help is for borrowers who were not successful in dealing with their current lender and who are not eligible for the 105 percent loan program because they do not have a Freddie or Fannie loan.

Help for homeowners can be found at the following websites:

·         Making Homes Affordable : Servicer participation in this program is voluntary.  However, the government is offering substantial incentives to servicers and investors, and it is expected that most major servicers will participate.  Participating servicers will sign a contract with the Treasury’s financial agent, through which they agree to review every potentially eligible borrower who calls or writes asking to be considered for the program.  As contracts are signed, a list of participating servicers will be available at www.makinghomeaffordable.gov. The homeowner’s servicer will need to be on this list in order to work through this program.

·         Federal Housing Administration – HOPE for Homeowners:  This is a federal program which has supposedly relaxed some of their guidelines and they may be able to help

Short Sale

For those Sacramento area homeowners where it does not make sound financial sense to stay in home where you owe significantly more than the property is worth, you are not able to continue to make payments and want to “start over” without the stain of a foreclosure or bankruptcy on your record the short sale continues to be a solid choice. This allows you to stay in your home for several months without making payments, sell it in an orderly manner and move away without any mortgage responsibilities.

If you have any questions or need help with any of these alternatives, feel free to contact me.  I can be reached at our MagnumOne Realty offices at (916) 290-9339 or by email to julie@jalone.com.