Millions of Americans are underwater on their homes, meaning they owe more on the home than the home is actually worth—but according to WT Lee & Associates, even homeowners facing the direst financial hardships are not without hope. As the housing market improves, and home values rise, many homeowners are finding themselves on better footing with their payments. Additionally, unemployment is steadily declining, which means more and more borrowers are bringing in the kind of income they need to get caught up on monthly mortgage payments. On top of all of that, a recent Dough Roller article lists some strategies for underwater homeowners, seeking to avert foreclosure. WT Lee & Associates has issued a new statement to the press, responding to these Dough Roller tips and offering some guidance of their own.
Certainly, this is a field in which WT Lee & Associates has some expertise. The law firm works with clients from all over the nation, particularly homeowners who are facing financial challenges and who are having a hard time making their mortgage payments. The law firm seeks to help these homeowners get back on track financially, without losing their homes or having to contend with short sales or foreclosures.
In response to the Dough Roller article, the firm says that both loan modifications and refinancing are potential options for homeowners who are underwater. “Refinancing can benefit a great number of homeowners who are underwater,” states the firm. “However, there are a number of requirements for a refinance that will disqualify a significant number of homeowners. Many of those homeowners would benefit from a modification. A good first step is to contact an attorney to review your options.”
The Dough Roller article affirms many of these points, noting that being underwater on a mortgage—or having less than 20 percent equity in a home—makes refinancing a challenge. With that said, there are numerous government aid programs out there for borrowers to avail themselves of, allowing them to avoid foreclosure by reducing their monthly mortgage payments.
The first strategy that the article offers is for homeowners to think seriously about having a new appraisal done. Many homeowners begin the refinancing process with an appraisal, and are shocked by the low value that appraisers present them with. Because appraisals are in flux and ever-subjective, however, it is often worthwhile for homeowners to spend a few hundred dollars on a second opinion; doing so could save them a great deal of money on refinancing.
The next tip offered is to look into some of the various government programs that are available to underwater homeowners. The first one listed is the Home Affordable Refinance Program, of HARP. For those underwater on their loan but not behind on their mortgage payments, Dough Roller says this is a great option. If approved for inclusion in this program, a homeowner will be able to take advantage of low interest and mortgage rates.
Another program listed is the FHA Streamline Refinance initiative; this program does not require an appraisal of the home, but rather is based on the price paid when the home was first bought. Thus, if a home’s value has fallen because of market conditions, homeowners can use an FHA streamline to secure lower-interest mortgage payments.
One more government program cited in Dough Roller is HAMP, or Home Affordable Modification Program. This is not a refinancing program at all, but rather a loan modification program—like the ones endorsed by WT Lee.
Another potential strategy offered in Dough Roller is for homeowners to take out two loans—though this is only an option for those who have good credit and who are not underwater by very much. Finally, the article recommends that borrowers make communication with their lenders a priority, as it is typically to the lender’s advantage to try to work out a loan modification.
“Working with a lender could potentially prove advantageous to homeowners, even though not all lenders are willing to help their clients. As such, those looking to secure a loan modification should absolutely enlist the services of an attorney,” concludes the press statement from WT Lee & Associates.
WT Lee & Associates is a law firm that strives to help homeowners remain in their homes, even during periods of financial crisis. The firm offers a number of foreclosure prevention services, including guidance through the loan modification process. Additionally, the law firm provides services in real estate litigation, in bankruptcy law, and in upholding the rights extended through the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. Ultimately, the firm’s passion is for working to help homeowners and their families find the best way forward out of economic uncertainty, and toward reaching all of their financial dreams.