Many homeowners continue to suffer from mortgages that are under-water (or upside-down). Their lenders are pressuring them for near-term resolution. But, their options have not been really that favorable – until now. Real estate investor Michael Baum from Pacific Property Investments (his Sell My House page) now offers the least-worst option.
Problem 1 – No Money
Many distressed homeowners want to sell their under-water homes, but they have little or no money to be able to close escrow. That’s a no-go situation – an not very favorable to begin with.
Problem 2 – Below Market Offer
Real estate investors will offer to buy the house from the distressed homeowner. But, the homeowner would usually have to accept a below-market-value offer so that the investor would make some money for his/her investment in the first place. THat works for some homeowners, but not others.
Problem 3 – Damaging Credit
Most of the typical options that distressed homeowners encounter end up being damaging to their credit.
A Short Sale (selling the house at market value, but below what is owed on the loan) can damage credit for 2+ years. And, it can trigger tax consequences (in other words, you could end up owing taxes on the difference between what the house sold for & what is owed).
A foreclosure (just turning the house over to the mortgage company & walking away) can be damaging to credit for 7+ years. More tax consequences.
A bankruptcy (walking away for all/most debt owed) can damage credit for 10+ years. But, there are two things to note regarding bankruptcies. First, With more recent government legislation, bankruptcies are harder to qualify for. Second, courts have ruled that you may end up being liable for the mortgage loan anyway.
The Least Worst Option
Baum’s Assignment of Mortgage Payments System (AMPS) features the following benefits:
- No need to bring money to escrow closing
- Get out from under the mortgage payment
- Saves your credit
To find out more about Baum’s AMPS program, visit his Sell Your House website.