Here is an article from Wayne Capurro from the Reno Gazette Journal, RGJ, discussing whether not it is a good idea to modify your mortgage.  It details what will happen to the home and other decisions that should be made before deciding to go through with a foreclosure: “Every day I hear questions like these: “Can or should I modify my mortgage?” “Should I ’short sell’ my home … or just let the bank foreclose?” “Which will hurt my credit more?” “Walking away would be so much easier … why should I bother with the headache of a ’short sale’?” “How would I benefit from going through that?”These are not easy questions to answer, and here’s why.Mortgage modifications offer most underwater homeowners their most hopeful outcome. Unfortunately for Nevada, only a few homeowners will receive help. The 105 percent Loan to Value limit is far too low for most of Nevada residents who are in need of it. There are many others who will not qualify under the Obama plan due to their being obligors on second mortgages and/or home equity lines of credit or for having fallen behind on their payments. They may be disqualified because their loan is not insured by Fannie Mae or Freddie Mac. Still, anyone who thinks they might qualify should check with their lender.Foreclosure is usually thought of as the last resort, or something that couldn’t be helped. However, many are now considering it as an option. They can afford the payment but no longer want to make it. They see their home as an investment, an under-performing one. “Why not cut my losses and let it go?”These individuals should seek the advice a tax lawyer or tax accountant, preferably someone familiar with their personal financial situation. Much speculation abounds these days about whether lenders will actually pursue deficiencies against the borrowers they foreclose on. As a Realtor who has represented more than a few defaulting homeowners, and having personally gone through a short sale and a foreclosure process myself, I can attest that lenders are aggressively threatening borrowers with deficiency judgment lawsuits.A more cooperative path is the deed in lieu of foreclosure. However, in the absence of a hardship letter and proof of ones inability to pay, most lenders will not allow the borrower to voluntarily hand over their deed.Short sales are an option for those who can’t modify and will almost certainly be foreclosed upon. Banks and the investors they represent are thought to come out better off through a short sale than a foreclosure. And often, the home sits vacant. Landscaping suffers, sometimes pipes freeze and break, or vandals wreak havoc.By contrast short sales involve the cooperation of the defaulting borrower. They are able to negotiate with the lender and possibly “settle in full” their debt rather than live with an “unsettled” foreclosure staining their credit history. The property is more likely to remain occupied and better maintained.Wayne Capurro is a real estate broker and co-owner of Capurro & Reid Real Estate, LLC in Reno.” 

Filed under: FORECLOSURE HELP, FORECLOSURES