What a surprise, the bail out program for the home owner is a bust!

First of all at the moment, the only government backed relief the defaulting homeowners will receive from the government is currently through Fannie Mae and Freddy Mac.  This will effect a very small percentage of the problem loans.

For reasons that remain unexplained at the moment the government will not be purchasing ‘toxic’ loans from the banks they are supporting and then working them out for the borrowers by reducing their principal which will reduce their payments and turning them right side up based on today’s values.

Too complicated, can’t effectively unwind these bundled securitized mortgages as they have been wrapped up in multiple layers of ownership which cannot be untangled…they say.

Fanny Mae and Freddie Mac will then provide only the most serious defaulters, 3 months in arrears with the  most upside down personal financial conditions to enjoy a reduced interest rate, possibly a reduced principal amount, an extended payment period to as much as 40 years.

In other words, helping the borrower to become right side up cash flow wise, but deeper in debt as the additional 15-20 years of debt payback increases the amount paid back well beyond the relief given….may be some relief for the borrower but a bonanza for the lender…again, what a surprise.

Here is the bottom line.

The ONLY answer for the borrower is a sharply reduced loan principal. Reduced interest is a terrific idea as well and would be very helpful, but reducing principal is the true answer to really fix the problem for the borrower.

So here is how you accomplish it, implement your own workout.

How to do this? It requires a broad and deep understanding of the market place and probably some expert support by a professional. Be it a short sale, or a short refi,  it can be done depending upon a number of circumstances. There probably will require some credit repair or rehabilitation at the end and a period of non payment of the mortgage, as default is neccesary for a workout, but it can be done.

Each case is different and unique and must be individually evaluated, but it can be done.

If the government won’t bail you out, then perhaps you should consider baling yourself out. A short refi in a second bank, or a short sale. Depending upon personal circumstances one of these will work. It may require some  cash, thus stopping monthly debt service now supports the action. It may require help from others but we are fighting very important battles and we must do whatever is required to survive and succeed.

This applies to every form of debt be it credit cards, mortgage debt, lines of credit, SBA guaranteed loans, any form of debt can be worked out.

Forget the government helping you…help yourself, call me I will show you the way. 413-584-2581, ask for Norm, he will arrange a tele-consult for us to explore your options.