As an additional feature of the mortgage rescue program, the Treasury Dept. has announced it will offer an incentive called "Cash for Keys" to help troubled borrowers get out from under the mortgages they can no longer afford.
Under the original Making Home Affordable program, homeowners are eligible for loan adjustments from their lenders if they meet specific criteria - such as 1) the home must be the primary residence, and 2) the mortgage balance can be no more than $729,750. Plus, 3) the reduced monthly mortgage payments cannot be more than 31% of income, and 4) the modified loan has to be greater than the value of what the property could be sold for through foreclosure.
If a borrower cannot make the mortgage payments under the adjusted terms, the lender can consider a short sale - very common now in the Ormond Beach and Daytona Beach areas, and then a deed in lieu of foreclosure, where the borrower voluntarily gives the lender the property. In both of these cases, the bank may forgive the debt, and there may be tax ramifications.
The new government plan, just announced - Cash for Keys - affects short sales and deeds in lieu proceedings. The borrower can receive up to $1,500 to assist with relocation, and Treasury will pay the lender/servicers $1,000 to complete the sale or deed in lieu of foreclosure.
Your situation will be complicated if you have a 1st and 2nd mortgage, in which case both lenders have to work together. Read the special report by CNNMoney in NewsGenius.
If you are behind on your mortgage payments and need help, contact me. I hold the designation CDPE, or Certified Distressed Property Expert, and have helped many homeowners sell their properties before foreclosure. You have options!
Sherry Armstrong, Realtor
sherry@sherryarmstrong.com
386-679-3191
www.ormondbeachflhome.com
www.sherryarmstrong.com
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