Christmas is not a happy time for homeowners about to lose their homes.
Statistics show an unprecedented number of homeowners delinquent on their mortgage payments or in foreclosure this holiday season.
On one hand, interest rates have gone up 25-50% since the Fed started raising interest rates.
Those adjustable rate mortgages taken out during the refinance extravaganza of 2001-2003, are adjusting with a vengeance, sending mortgage payments zooming.
On the other hand, the sizzling housing market has dramatically cooled off in many areas, including New York and California.
This means that borrowers will not be able to refinance their exploding mortgages to get lower payments, to say nothing of being able to take cash out to pay their credit card or mortgage delinquencies.
Millions of homeowners are being squeezed by their mortgage payments.
One hiccough, an unexpected bill, a layoff of one breadwinner and they will be in danger of losing their home.
If you are facing this dilemma, you must act quickly to save your home.
There are government programs as well as programs offered by the banks themselves that can help you.
As quiet as it is kept, your lender and the government stand to lose money if they cannot help you! Taking back your property and selling it at auction, will probably result in their taking a loss, especially with the housing market softening as it is now.
I have seen estimates that banks lose between $30-$50,000 on a foreclosure.
Before you shed any tears for them, know that they have the ability to throw that loss back onto you, as you will see.
To help prevent the loss of your home, banks may give you a payment moratorium to allow you to catch up.
Or perhaps restructure your mortgage so that your payments are lower.
In some cases, government agencies will give you money to make your delinquent payments in the form of a grant that you don't repay! Unfortunately, these programs are not advertised and the problem is that each lender or government agency has its own maze of rules and requirements making it difficult for homeowners to find and qualify for these programs.
But you must still make the effort, with our without professional help.
If your home does not sell at auction for the full amount of the mortgage and all the other legal, administrative, management fees etc.
the bank adds to your mortgage, they can get a deficiency judgment against you, in many states.
Armed with this judgment, they can come after you and take anything of value that you own, even garnisheeing your wages! If they cannot get the money from you; they will write off their loss on their taxes, generating an IRS form 1099-M to you.
The IRS considers the amount of their loss, as shown on the 1099-M, as income to you and will add it to your income for the year.
You're expected to pay the additional taxes owed in cash with your next return.
You cannot let the bank take your house.
If you are delinquent in your mortgage payments this Holiday Season, don't ignore them.
You could be setting yourself up for many Unhappy Returns.
Talk to your lender as soon as possible.
Statistics show an unprecedented number of homeowners delinquent on their mortgage payments or in foreclosure this holiday season.
On one hand, interest rates have gone up 25-50% since the Fed started raising interest rates.
Those adjustable rate mortgages taken out during the refinance extravaganza of 2001-2003, are adjusting with a vengeance, sending mortgage payments zooming.
On the other hand, the sizzling housing market has dramatically cooled off in many areas, including New York and California.
This means that borrowers will not be able to refinance their exploding mortgages to get lower payments, to say nothing of being able to take cash out to pay their credit card or mortgage delinquencies.
Millions of homeowners are being squeezed by their mortgage payments.
One hiccough, an unexpected bill, a layoff of one breadwinner and they will be in danger of losing their home.
If you are facing this dilemma, you must act quickly to save your home.
There are government programs as well as programs offered by the banks themselves that can help you.
As quiet as it is kept, your lender and the government stand to lose money if they cannot help you! Taking back your property and selling it at auction, will probably result in their taking a loss, especially with the housing market softening as it is now.
I have seen estimates that banks lose between $30-$50,000 on a foreclosure.
Before you shed any tears for them, know that they have the ability to throw that loss back onto you, as you will see.
To help prevent the loss of your home, banks may give you a payment moratorium to allow you to catch up.
Or perhaps restructure your mortgage so that your payments are lower.
In some cases, government agencies will give you money to make your delinquent payments in the form of a grant that you don't repay! Unfortunately, these programs are not advertised and the problem is that each lender or government agency has its own maze of rules and requirements making it difficult for homeowners to find and qualify for these programs.
But you must still make the effort, with our without professional help.
If your home does not sell at auction for the full amount of the mortgage and all the other legal, administrative, management fees etc.
the bank adds to your mortgage, they can get a deficiency judgment against you, in many states.
Armed with this judgment, they can come after you and take anything of value that you own, even garnisheeing your wages! If they cannot get the money from you; they will write off their loss on their taxes, generating an IRS form 1099-M to you.
The IRS considers the amount of their loss, as shown on the 1099-M, as income to you and will add it to your income for the year.
You're expected to pay the additional taxes owed in cash with your next return.
You cannot let the bank take your house.
If you are delinquent in your mortgage payments this Holiday Season, don't ignore them.
You could be setting yourself up for many Unhappy Returns.
Talk to your lender as soon as possible.
Source...