Notice I did not say heed your attorney, or even believe your attorney. and I certainly did not say abuse your attorney. I do want you to use your lawyer, and here’s why…
The problem that prompts this advice comes from a young couple (they could be old) who own a home. They are required to relocate. Because of today’s market, they can’t sell the house for an amount that pays off the mortgage, and they can’t afford another one unless they sell. Along comes a “professional” who assures them he can help with the problem.
To this point the problem is a theme repeated daily in too many households. The way those families treat the problem begins the many variations on the theme. Every possible solution carries heavy decisions including a decision not to move, short sale, foreclosure, default, and countless others. Those decisions must be made by the owner, not by someone else, and their consequences will follow the owner for years. When the solutions get mixed up with the best interests of the rescuer, and too often that happens, the potential for disaster goes off the scale.
The example in my office last week was “resolved” by a real estate “professional” who offered to take title to the house in exchange for his oral promise that he find a renter to cover the payments until the house was sold. This rescuer paid nothing for a deed, found a renter, paid nothing on the mortgage, and put the rent money in his pocket. Six months later interest rates are low enough that, with the credit rating they had initially, this young couple could now refinance the house and use the rental income to cover the mortgage payments. Their credit rating is now destroyed because they relied on the rescuer to make payments, the payments are far into default, and now they don’t even own the house. The rescuer has rescued only himself.
I said above there are “variations on the rescue theme”. That statement alone is not enough. The real truth is that every property, owner, mortgage, and mortgage company has its own list of factors that they should consider to find a solution. The resulting confusion defies the application of any one formula or recipe. This is not a problem that will solve itself in any way helpful to the owner, and the choices are important and difficult.
Whatever considerations exist, call your lawyer. If you believe you don’t have a lawyer, you are wrong. When a lawyer agrees to work for you, his (or her) loyalty belongs to you, not to the mortgage company. His may be the only voice that truly belongs to you.
The money you pay a lawyer will be only a fraction of the trouble you might avoid. In my opinion it is important that the voice you listen to is driven only by your best interests.
The same motives that got the public invested in over-valued real estate still exist. Be wary of mortgage rescue services, especially those not supported by a professional license, those who seek to take title or place a lien on your property, and especially those that guarantee success.
Consult your lawyer.