Mortgage payments on my “under water” home are no longer affordable due to financial hardship. What can I do?

Question: I have been paying my mortgage on-time for many years. Now I am late on my payments by one month as I have ended up in financial hardship due to certain events in my personal life. Very soon I will not be able to afford my home. What can I do? I owe approximately $225K and my home is now only worth $200K. In the past, I tried to modify my mortgage and after a year of loan modification process I was denied.

Response: Whether you qualify for loan modification depends on various factors, such as gross monthly household income, debt to income ratio, net present value of the home. On the mortgage of $225K, you could likely qualify for HAMP loan modification (if your servicer participates in HAMP) if your gross monthly income is approximately $3K. However, if you are still unable to afford your monthly payments or you have insufficient income, then you should likely consider a short sale.  Consider contacting a knowledgeable attorney, who could advise you on options that would work best for you.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information. Copyright © 2013 Law Office of Svetlana Kaplun, P.C.

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