Kim Swagert, Broker, CRS, GRI 
**Update 5/15/09 **
The "Making Home Affordable" program is now being implemented by lenders looking to modify your loan, and by lenders who can refinance if you owe more on your home than it's worth. First, you have to determine if Fannie Mae or Freddie Mac owns your home loan. This is different than the servicer you may be making your payments to. To find out if Fannie or Freddie owns you loan, click here.
If your mortgage loan is owned by one of them, go to the Making Home Affordable page here, and you can determine which option works best for you.
If you do not qualify for one of these programs, you can contact me for a list of local lenders who may have other refinance options available to you.
Below are the links mentioned. If I can be of service, please call or email me.
http://loanlookup.fanniemae.com/loanlookup/
http://www.makinghomeaffordable.gov/
* Update 3/2/09 *
Check out the website www.KeepMyHouse.com for some great information on what to do to try and keep your home. This article goes into great detail about how to talk to your lender about loan modification. Also, visit my web page here on how the housing stimulus could help you. Good luck!
Loan Modifications, Short-Sales & Foreclosures
You've no doubt heard a lot about these terms in 2008. It's been quite a roller-coaster ride for the housing industry, lenders and homeowners. I've spent a lot of time this year meeting with homeowners in trouble, and wanting to make the best decisions for themselves, their credit, and their stability. Most of these homeowners are good, hard-working people who put money down on their home, made good choices, purchased what they could afford at the time -- and then things changed! Jobs lost or transferred out of town. Illness. Retirements lost. Home value dropped. Things just out of their control.
The sad thing is this is middle America. This is you and me. These are our neighbors, service providers, store clerks, family members... And the really sad thing is it's all the huge conglomerate corporations that are being bailed out -- not middle America. (But don't get me started...)
I have found that most people in this situation don't know all of their options. As Realtors, we have a lot of information, and we are learning more each day on this subject too. Following is a basic rundown of these three options:
1) Loan Modification
A loan modification is a change in one or more of the terms of a borrower's loan, and results in a payment that the borrower can afford. These changes may include either an extension of the term of the loan, and/or a reduction or modification of the interest rate, the monthly payment, or the principal balance. There are many types of modifications that could be offered to you. Talk to the "Loss Mitigation" department of your lender. It is important to understand what you are agreeing to before signing anything. A Realtor or trusted lender could help you make some sense of this, however, an attorney would be highly recommended in this instance.
2) Short Sale
Also known as a real estate short pay-off or a pre-foreclosure workout, a short sale is an agreement with a lender to accept less than the amount owed by a borrower via a sale of the property to a third party. With this agreement, the lender releases the borrower from the mortgage, thereby preventing foreclosure. There is a lot to consider with this option. Sometimes you are responsible for the short amount. Sometimes you may not be, but there could be tax repurcussions to you. You will want to be sure you understand this option and what it includes before agreeing to anything.
3) Foreclosure (Or Deed In Lieu of Foreclosure)
Another option is called Deed-in-Lieu of Foreclosure. In this situation, it may be that you cannot find an interested buyer to sell your home for a short sale and are facing a foreclosure. Sometimes you can sign your deed back to the Lender without facing the proceedings of a foreclosure. This mostly occurs when the market value of the home is higher than the lien against the home. The settlement will be at least equal to the fair market value of the home, and could net you some money rather than losing all your equity.
Finally, if no other option above works, you may face Foreclosure. You may decide to allow your home to proceed into mortgage foreclosure. This is not the best option as it will severely damage your credit and ability to obtain a home loan in the future. Not only will you lose your home, but also all of your equity. Also, if there is no equity, you may be responsible to your lender for the shortage.
Click here to get a detailed description of how foreclosures work in Oregon.
As you can see, there are options out there. Which one is best for your situation is a personal decision, and often can be figured out with the help of a knowledgeable Realtor. I do have to offer a disclaimer here: Realtors are not attorneys or accountants, and it would be wise to discuss potential legal and financial ramifications with a qualified attorney or accountant to be sure you understand your responsibilities and potential liabilities.
Valuable Foreclosure Assistance Resources
Homeowners who face the prospect of losing their home to foreclosure need all the help they can get. The Wall Street Journal compiled a helpful list of telephone hotlines and Web sites, by state, for at-risk homeowners, and it has published a summary of the various mortgage modification programs that are either proposed or currently in place. HUD and NAR also provide lists of foreclosure assistance programs by state.
For more information on the above subjects, here are some good links:
HUD - Hope for Homeowners
Loan Modifications
Short Sales
Foreclosures
Government Help
Hope Now
Fannie Mae
Freddie Mac
As always, please feel free to contact me to discuss your personal situation and real estate needs.
Kim Swagert, Broker, CRS, GRI
Coldwell Banker Holman Premier Realty
3815 S. Sixth St., Suite 110
Klamath Falls, OR 97603
Cell: (541) 892-8777
Office: (541) 884-1343