If You Can't Make Your Mortgage Payments, What's Holding You Back From a Short Sale?

You would think that not being able to make ends meet and pay your mortgage would galvanize you into activity, wouldn't you?

Well more often than not, people don't act at all.  They often don't even try to find out what their realistic options are.  One of the married couple may, but then they are often slowed down by their partner who thinks the problem will blow over, won't be as bad as they think, and that they will recover.  Why is that?  I'm not a psycologist.  I can only report on what we see every day.  We see that about 80% of the activity demonstrated by people in financial difficulties can be classified as "doing nothing."

The obvious choice would be to sell their home, take a short sale if possible, rent something cheaper, save up, pay off credit cards, and start over.  Having learned from the experience, you wouldn't make the same mistakes and you would forge ahead to a finacially secure and successful future!  All those good puritan values would come out, it would be Cinderella makes good, everybody's dream would eventually come true, etc etc!!

And it might!  But it is pure agony to watch.  We see people in what looks like clinical depression, giving up their successful identity, fearing that the dreaded truth may become common knowledge with people talking behind theirs backs about their failure to provide for their family, or their inability to manage their money.  Their children may have trouble with their friends talking about their familiy's decline in the social pecking order. Every so often we find couples involved in unbelievable anger which they feal entitled to vent on anyone who is close by. Often the anger is aimed at the person who is trying hardest to keep them focussed on a better future, they know more than we do, they have rules of engagement which prolong the situation, and they lay blame on everyone but themselves. And sometimes it is the guy in the family who has trouble admitting that there is only one way out and it is better to get on with it and start the recovery and sometimes it is the lady who has no problem with the change and just wants to get it over with.

Is it all about ego really.  Are we so attached to our image of the successful family with no cares in the world?  The identity of the young cool person who is climbing the career ladder?  Is this what is so hard to let go of that we make things worse and prevent a quick recovery?

As a team, completing short sales and working for asset managers selling foreclosures, we are dealing with people in trouble all the time.  We do a lot of hand holding, encouraging, ignoring the anger and trying to keep focussed ourselves,  or trying to keep everyone else focussed on a better time without the incredible worry this market has produced. Often, not making ends meet has nothing to do with sub prime loans, 100% loans, or outrageous credit card debt at all.  It has to do with downsizing which no-one expected when they bought their house, huge increases in the cost of living that no amount of budgeting can avoid, relocation to another city just to keep a job and no safety net provided by the employer in the form of a comprehensive relocation package that would pay you at least what you paid for the house.  This market and the need to ask the bank to forego some of the loan payoff, has to do with 3-5 years of a declining market that has been increasing in speed every month and it is still going down. 

There have been signs that it has leveled off since no one now has their house on the market unless they really have to sell, since the interest rates declined momentarily last fall and lots of very sensible people refinanced or bought a house.  And we are really hoping that if the recovery bill passes and the tax credits for house buying are still in, that the housing market will start to improve enough that the median sale price will start to go up.

However, even if the median sale price goes up and the inventory is reduced, it won't help most people who have to sell or who are currently unable to make their payments.  The only thing that will help those people is to improve their income or get them out of the house and have them rent something at a much lower payment, so that they can recover their credit and savings.

If you see yourself in this blog, don't wait!  At least give us a call and talk with our short sale and foreclosure expert, Chris Siegel.  Knowledge is Power. We are here to help you make a good decision, to help you on the road to a better financial future.  This may or may not involve selling your home, doing a short sale, or staying put.

Don't be afraid to call.  Carol Meadows 513.766.3878.  Chris Siegel 513.766.3858.