Mortgage Relief Formula: Do You Really Have To Pay Your Bills?

July 23rd, 2011 | Posted in Debt Relief

In my role of helping people with short sales and as the developer of the mortgage relief formula home study course, I talk to people who owe more than their house is worth and can’t afford the mortgage payment. A lot of the houses that people discuss with me are in the $200K range but many are upwards of one million dollars. I have clients with $1 million or $1.5 million homes who are in the tough position of figuring out what they should do.

For example, if the buyer pays $180,000 because that is all you can get as far as an offer, and your mortgage is for $250,000, you have to pay in $70,000 cash at closing or else the deal will fall through. Do you have that kind of cash? Many people do not have that money. And I don’t suggest you raid your 401(k) either. So the only other option that is the least bit appealing is a mortgage short sale. A short sale involves mortgage lender cooperation. Your mortgage company must agree to accept the buyer’s full proceeds as payment in full for your mortgage. The home loan lender lets you out of your mortgage and allows the new buyer to step in and buy your house. You are out of the picture and you didn’t put any cash in.

See, as a renter, I can move out. As long as I pay the rent, I can stay here. My landlord is bound by law to fix things that break and provide a general level of good repair. But as a homeowner, you are on your own. You owe more than your house is worth so it is hard to move away. And all the repairs and all the headaches are yours alone. I say you are a homeloaner in this case. And you are a mortgage relief formula slave. You are working very hard in order to pay too much to a lender. Where is your life? And you worry about where you are going to live and how you are going to pay for a medical emergency or temporary period of unemployment or disability.

Second mortgages present a particular problem for the higher priced homeowner. Many times the short sale proceeds will be insufficient to pay your first mortgage off, let alone the second. The second mortgage lender may accept partial payment as a short sale but they may refuse to release you from the possibility that they will pursue your assets in the future. The statute of limitations for this sort of thing can be as long as four or five years, depending upon your state.

Third, begin to live within your means. If that means renting a smaller place, then so be it. What you cannot do is what so many Americans are doing. You cannot live beyond your means and expect someone else to take care of you. That is your job. Am I advocating that you simply walk away from your house or your credit cards? No. I developed the Mortgage Relief Formula which is a home study course, a step by step guide to getting out from under. Out from under a house that you cannot afford. Out from under a crippling mortgage. Out from under crushing credit card debts. And I think you can do all this and actually improve your credit score. That’s right, your FICO score can go up. So if you think you have no options, that you are locked in to this debt slavery let me assure you that you are not. I got out from under years ago, in the last California real estate crash. I thought I was trapped but I found out I wasn’t. I did a short sale, rented for awhile and then used the same bad sellers’ market to my advantage and bought a gorgeous house for next to nothing down. I didn’t go to the bank for a loan, either. The sellers let me pay the payments on their existing loan.

Learn more about Obama Mortgage Relief Plan Qualifications.