Sellling your home Short? You are not alone!

Option ARM loans are resetting.

Selling your home short?  You are not alone!
Option ARM Loan Short Sell Seller
Standard and Poor’s reports about 93 percent of option-ARM buyers chose to pay a minimum amount less than the interest due.

Many of these loans were taken out in 2004 and are close to their five-year reset when the loans convert to a standard amortization.  If the accumulated interest has pushed the loan-to-value ratio above 110 percent some of the more recent loans will reset early.

One example of the impact of this is outlined in the S and P report, the payment on a $400,000 mortgage goes from $1,287 to $2,593.

If this sounds like your mortgage, you are not alone.

Nearly all of the 350,000 option-ARM borrowers now owe more than they owed when they first purchased their homes.

The authors of the report say that many ARM borrowers aren’t good candidates for refinancing or modification because their loan-to-value ratios are too high for the government’s Making Home Affordable program.

Sometimes lending choices that were smart at the time don’t really pay off for the consumer in the long run of unforeseeable economic crisis.

Comments

  1. Cindy Marty says:

    Interesting.
    What happens if the homeowners can’t qualify for the “Making Home More Affordable Program?”

  2. Cindy Marty says:

    Many people can’t qualify for the “Making Home More Affordable Program.”
    Statistics have shown those who do qualify don’t, unfortunately, succeed.
    It is a sign of the time we live in. Consider exploring a short sale.
    It doesn’t cost anything to consider moving on with your life and getting
    out from under the stress of debt.

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