A very common scenario in San Diego and many areas of the country. Joe Homeowner purchased a home in 2006 for $500,000, today his home is now worth $300,000. My interactions with most of these homeowners 6-12 months ago was that as long as they could afford the payment they would continue to make their payments knowing the values would eventually come back. The recent attitude of many homeowners I am coming across has taken a much different attitude. More and more homeowners are looking for a short sale, modification or just walking away. Can you blame them? Would you continue to make your mortgage payment on a home that was worth $200,000 less than what you owed? A recent RealtyTrac statistic said that there are approximatively 60,000 homes in San Diego County that are at 150% loan to value or more. WOW, did you understand what I just said. That means homeowners owe their lender $150,000 for every $100,000 of home value.
I am not a fan of people walking away from their mortgage but in CERTAIN situations I really can’t blame them. Yes they may have made a mistake and purchased a home they could not afford but sometimes they can afford the payments but they are sick of the value and don’t want to continue paying their mortgage. Perhaps a short sale is their best option. Everyone’s situation is unique and you really need to make sure you know all of your options before you decide to do something. We don’t slam everyone into a short sale. Just last week I talked to someone who owned several investment properties and they were considering a short sale. I told them they really needed to consult a tax professional and sure enough. The tax consequences on the short sale was going to be horrendous. It didn’t make sense for that particular person. They were better off trying to complete a modification (Difficult on Investment Property) or let the property go to foreclosure.
Whatever your thinking. Consider your options, make sure you consult a trusted real estate agent, your tax preparer and avoid those horrible loan modification scams. We can help you with a short sale in San Diego. Don’t hesitate to call or email us.