Monday, November 24, 2014

Mortgage Relief Solutions – Don’t just walk away…walk away right.

Dear Homeowner,

Do you owe far more against your home than it's worth?  (also known as an upside down mortgage or underwater mortgage)

Do you have the financial ability to make your payments each month, but with each passing day you're questioning the financial wisdom of 'throwing good money after bad'? (strategic default)

Or perhaps you no longer have the financial ability to make those mortgage payments any longer due to unforeseen circumstances such as loss or reduction of income, divorce, etc. (economic default)

Even if you really like your home, your neighbors and your location, are you becoming concerned that your home represents a serious liability which could severely harm your family's financial security?

If so, then you're not alone... the current economic crisis has severely damaged many other people like you - people who are good, honest people, who have sufficient resources to make their payments, but who are being seriously burned due to a financial crisis not of their own making. 
 It's not your fault.

This current economic crisis is unprecedented in our lifetime, leading many to default on their mortgage or seriously consider it as an alternative.

But fault doesn't matter in this case.  Fundamentally, you have two choices:  Keep paying on your mortgage, even though you have no choice of ever recouping that money... or stop paying and face the consequences of a foreclosure.

That's not an easy choice.  There are many considerations for you to think about...
  • Moral Considerations...  such as "I made a promise to pay this mortgage... am I being immoral if I choose not to do so?" (banks and corporations do this all the time)
  • Social Considerations... such as "Will my friends and family think less of me if I let my house go back?"  (go broke to keep up with the Joneses)
  • Neighborhood Considerations... such as "My foreclosure will probably hurt property value in my neighborhood... do I owe it to my neighbors to stick with my mortgage?"
  • (many of your neighbors have already gone)
  • Financial Considerations... such as "Will I ever be able to buy another home?  Will my credit be irreparably destroyed?" (there are ways to limit or avoid this altogether)
  • Legal Considerations...  such as "Can the bank sue me or take away my money or other property or possessions if I default on my mortgage?"  (This is the biggest issue...but most people don't have any idea what to expect)
  • Tax Considerations... such as "Will I owe more money to the IRS or my state if I default on my mortgage?"
Yes, there are a lot of things to consider all because of this monthly mortgage that you cannot or are no longer willing to pay.

The truth is that there is no simple answer to whether you should choose to let your property return to the lender or bank.  You should weigh each of those considerations very carefully before making a decision, because once you make the choice to let go of your property, you can never go back. 

For many people, releasing the property back to the lender is not the right answer. (And we’re saying releasing it to us, Mortgage Relief Solutions might be a better alternative)

If Your Hope Is To Avoid Returning Your Property To The Lender,

The best option, in general terms, is to do everything you possibly can to avoid defaulting on your mortgage.  Of course that's pretty obvious and nobody questions the truth of that idea.  But if your situation is - like millions of Americans - so challenging that it appears that defaulting on your mortgage represents a net positive to your financial situation, then you have to take great care to understand the difference in these three concepts:

  • "Economic" Default – where you have no choice because of loss of income, etc.

  • "Strategic" Default – You can pay but choose not to, because it is not economically sound to throw good money after bad

  • "Suicidal" Default – defaulting without a plan – most so-called strategic defaults end up this way
"Economic” Default is the most common type of foreclosure situation.  It happens when a person falls on hard times and is simply unable to make their mortgage payments.  As a result, the lender initiates foreclosure proceedings and repossesses the property.  While there are some very negative ramifications for a person who experiences "Economic" Default, the fact is that these folks probably don't face a lot of future liability as a result of their foreclosure for one simple reason:  They're already financially insolvent.  They don't really have anything to lose... and so it's not likely this person's lender will take much, if any, additional legal action against them in the future, because there's no real financial advantage for doing so.

"Strategic" Default is a "well-planned" foreclosure.  This strategy is used by financially savvy people who do have the financial ability to pay their mortgage, but who recognize that they are simply throwing away good money by doing so.  Strategic Default involves understanding the financial and legal ramifications of a mortgage default, and planning in advance to mitigate or eliminate the risks that a mortgage foreclosure represents.  Unlike people facing "Economic" Default, people who are qualified to perform a Strategic Default are not financially insolvent and thus have financial assets that a lender or other parties could pursue to satisfy a foreclosure debt.  Thus, Strategic Default is the skillful execution of a series of simple but critically important legal and financial maneuvers to guarantee that the financial and physical assets you've worked so hard to acquire never become subject to legal risk as a result of your mortgage default. And in that case an attorney or financial advisor should be consulted to take the appropriate steps and measures. (could be costly however) At least that’s how a Strategic default should be but unfortunately most turn out to be a “Suicidal Default”.

"Suicidal" Default is the worst of them all.  Here's the essence of it:  Just because you choose to stop paying your mortgage doesn't make your default "Strategic".  In fact, if you're a person who does have the ability to make your payments, and you choose to allow your property to go to foreclosure anyway but you do nothing to protect yourself from the legal and financial problems that foreclosure can cause and simply let the chips fall where they may then you've performed a "Suicidal" Default.  This is because lenders love to take legal action against people who have defaulted but who clearly had the financial resources to pay.  Those actions can come in the form of lawsuits (frequently more than one) and civil actions that can totally overtake your financial life.

Remember:  Your default may not even qualify to be a “strategic default”. 
Strategic defaulters are people who are not in financial turmoil and who can and do make their payments on a timely basis, but who realize that they may be wastefully throwing away money by doing so.  If you're facing foreclosure because you're experiencing hard times, then you do not fall into the strategic default category.

...but if you
 do have the financial resources to comply with your mortgage, yet you question the financial wisdom of doing so, then I have a serious question for you:

What Makes A "Strategic Default" So Strategic In The First Place?

If you don't know the answer to that question, then you'll probably be committing financial suicide by defaulting on your mortgage.  For example, did you know:
  • You could qualify for a new mortgage and a new home virtually immediately after a strategic default…depending on how it’s done or it could take years.
  • Your legal liability may be dramatically compounded based on precisely how long you live in your property after you stop making payments?
  • After your lender forecloses your property, they'll decide whether to sue you - they'll almost certainly win if they do - and can then drain your bank account of cash, put liens (and foreclose) on any other property you own, and generally ruin your life... if you don't take care to protect yourself before choosing to stop making payments
  • So now you know a little more about the different type of default scenarios. So what exactly are we, Mortgage Relief Solutions getting at?

What we are simply saying is this:

If you are an “economic defaulter” and you have no choice but to default then we may still be able to help you. After all if you had to default anyway and we could possibly step in and save the day would not that be a plus? In other words a losing situation could possibly turn out to be a winning situation. Let us see if it is feasible for us to step in and take over the property and perhaps save it and what’s left of your credit. If we can’t do it then the original outcome would be the same. Inevitable foreclosure. Move on. But if we can salvage the situation then there is benefit to you. What do you have to lose but what you would have lost anyway?

If you are a “strategic defaulter” and your logic is I can pay this monthly mortgage but it does not make economic sense to continue to do so, I want to sell the house but can’t because I owe more than what it’s worth (upside down, underwater) and I’m stuck with a losing investment that I’m just paying on monthly with no economic benefit or positive return and I’m going to just stop making payments and let the chips fall where they may (suicidal default), would it not make sense to simply turn the property over to us, Mortgage Relief Solutions? After all if we can continue to make the payments in return for turning the property over to us and you were going to intentionally default and we step in and there is no default, would that not be turning a definite losing situation into a win-win one? Bottom line is if you were going to walk away from your mortgage any way, might as well turn it over to us, Mortgage Relief Solutions and lets us take over the mortgage payments and property. The worst that could happen is what you intended any way. Intentional default. The best that could happen is no default and that monthly mortgage payment is yours to do as you please!
Again, there is an alternate solution... but if you aren't aware of it, you can’t plan for them, then your default can be suicidal and not truly strategic.

So….economic or strategic defaulters, Call us. Mortgage Relief Solutions. We’re here if you are in either situation and you seek an alternate solution. And yes, we take over your mortgage payment and house for the full amount of what you owe until we can resell the property and satisfy the mortgage debt. Upside down mortgage? Underwater mortgage? Can’t sell? No problem. We take over…You move on.