Cant afford house payments cant refinance?

Barb
My friend and her husband cant afford the house payment no more and cant refinance 2 get a lower payment due to they owe various credit cards. They cant sell it either because the value of the house has decreased by 20, 000.00 theyre are thinking about walking away is there any hope for them? what can they do?

Melinda
call a Realtor and tell them to put it up for sale as a short sale it's the last choice good luck

Alpha
they need to contact the bank and make arrangements so they don't lose the home to foreclosure...Forbearance: The arears are put back onto the loan amount and you are brought "current"...Downside, you will now owe even more...With the real estate market and millions of foreclosures, the last thing the bank wants is to own yet another house...Try not to walk away. A foreclosure is on the credit report for 10 years and will weigh HEAVILY on any future loan decisions...COMMUNICATE WITH THE BANK. Worst case, they can short sale the home...The bank agrees to the actual value not the owed value and you sell the home for less than what is owed. Upside: you are out from under the loan if you can sell. Downside: The shorted amount is shown as income and you will be given a 1099 so you may owe taxes.Another option: Contact your real estate agency and see about renting out the home...Upside: you continue to make payments, your tenants assist in paying or pay your mortgage through their rent. Downside: You become a landlord

Newton
They should contact their lender before going in default on their payment, if not too late. They need to explain their hard ship. It seems that lenders right now have realized they are a big part of the problem. They are bending over backwards to make things work. That might still mean your friend loses her home, but she might not be tagged with a deficiency judgement whereas a few years ago a judgement on her credit would be a certainty. The lender might also ask for a Deed in Lieu or a Forbearance agreement. To useful terms to throw out that might keep the foreclosure concept away.

Bambi
Actually, Jeffrey's answer is correct except for the last part. Depending upon the lender, and pmi company, a short sale might be contingent upon the owners signing a unsecured promissary note (loan) for around 15% of the amount discounted on the short sale. This is unsecured and can usually be discounted even further after a year or so. There is a sabatical on 1099s at the moment, so there won't be any 1099s issued where the sellers are hit with an income tax bill until the end of next year. However, even if a 1099 is issued, if the seller can show hardship on his tax returns, the tax bill has often been waived, but ensure that your accountant knows what he is doing. Walking away is not an option. Talk to your lender's loss mitigation departent.David Litterickwww.ShortSaleServicesForRealtors.com