Real Estate Questions Answered Here
by Art Santellen, REALTOR®

Q: I got laid off my job and I've been supporting my family on my savings. Since I had a good paying job for many years, I bought a house.

Now, because I don't work anymore, I can't afford the monthly house payment. I've thought about re-financing but no one will give me a loan because the only income I get is Social Security and income from my wife that only comes to $xxx per month. I'm ready to walk away from the house and let the mortgage company foreclose on me. Do I have any options?

A: Yes. I know you've done some of these but let me list all of your options for the benefit of my readers.

1. You could talk to your mortgage company, explain your situation, and see if they can lower your mortgage payments to better fit your reduced present income. This can be done by either extending the time to pay off your loan or by reducing the interest rate they charge.
   
   
2. You could try to refinance your home with a different mortgage company. A good place to start would be a federally insured bank that may have a special program to fit your budget. Remember that banks must provide evidence to the federal government that they are bending over backwards to support their community and abide by the Community Re-investment Act.
   
   
3. You could sell your home. Begin by talking to at least 3 Realtors. Have them run a comparative market analysis of your home to establish a fair market value. Then, ask them for their marketing plan and what they charge. (You can also call me at 381-1114 and I'll give you a list of Realtors I can recommend for their good work and integrity).
   
   
4. You could rent your home. Remember to rent it for at least 125% more than your monthly mortgage payment. That little bit extra will allow you to set aside some money for repairs and emergencies. Also, you may want to hire a professional property manager to handle any tenant issues. These people also advertise your property and screen tenant applicants. (Again, call me at 381-1114 and I'll give you a list of Property Managers I can recommend).
   
   
5. You could ask your adult children (or a parent) to become co-borrowers with you in an attempt to re-finance your home. Their income, added to yours, may be just what you need to qualify for the new mortgage.
   
   
6. There are a number of mortgage products which start with low interest rates and increase over time. These products have adjustable interest rates based on any number of indices. Be careful, though, it is only a temporary solution. Over time, the interest rate will go up (probably).
   
   
7. Another interesting mortgage product is called a "Reverse Mortgage". These special loan products are designed for people on fixed incomes with significant equity in their homes. These would be people who have either paid off their home loans or have only a few years to go before their home loan is paid off. These loans are paid off by the equity in your home. Again, you will want to work with a trusted home mortgage consultant (like me) before signing up for a reverse mortgage.
   
   
8. You can let your property go into foreclosure. The government will allow you a certain amount of time to try to save your home but in most cases it will be returned to the bank, HUD or VA, depending on your type of home loan.
   
   
9. You can declare yourself bankrupt. In many cases the inevitable eviction is merely delayed, not avoided.
   
   
10. You can grasp at the straws that are offered to you by a number of people (investors, lenders, and real estate agents). Once the foreclosure process begins, the County Trustee will send you a letter called the "election and demand" notice. Since this information is very public (it's on the internet), many people who make a living this way will contact you and offer to buy or sell your home. Some will even promise to help you save your home. I've never heard of a single case where they really helped. If anyone out there has been helped by these people, I'd sure like to know.
    
    
11. You can call Jan Robinson at 447-9300. The Rocky Mountain Community Land Trust is a non-profit organization here in Colorado Springs that is chartered to help below area median income families buy their first home. In a dramatic new program, still in it's formative state, the Land Trust is offering to help people, just like you, to save their home. This is a re-finance plan designed to allow you to get the loan your income and debt authorizes. Then, the Land Trust makes up the difference so you can pay off your existing (high mortgage payment) loan. Yes, there are conditions to this help and it's not for everyone. But, at a minimum, you should give Jan (or me) a call and tell her your Uncle Art sent you.

Art Santellen is a licensed real estate professional with Intrepid Realty in Colorado Springs.

News Flash: Art is also a Home Mortgage Consultant with Wells Fargo Home Mortgage!! If you have a question you'd like answered, please send them to Art care of Hispania News PO Box 15116, Colorado Springs, CO 80935. You may also send your question directly at Art via email at ASantellen@hotmail.com. Or call him at his Wells Fargo Office: (719) 381-1114.

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