Our biggest worries now are bill collectors, rising gas and food prices, and job security. Has the American dream changed in as little as 2 years?? Many of us are trying to keep a roof over our heads and food on the table. Anyone who has bought or refinances our homes in the past 6-7 years is upside down in their mortgage as much as 50-60%, which can equal hundreds of thousands of dollars. Foreclosure notices are mounting rapidly and many expect it will take 2 or more years just to see a leveling off. Is there any good news? Yes! Struggling homeowners have options. The first is making good with your lender by winning the lottery. Second option is foreclosure: They can sit around and do nothing, wait for their Notice of Trustee’s Sale to come in the mail and find a new place to live within the next 90 days. They will have major credit issues moving forward and not be allowed to buy a home again for several years after assuming they clean up their credit. Since Arizona is a non-recourse state, they will not be responsible for their first mortgage, but the 2nd or HELOC is considered consumer credit and the lender will be going after them for that. Be aware that a deed in lieu of foreclosure, mailing in the keys, is treated the same way. Third option is Loan Modification. Those who have the desire to stay in their home and have income can contact their lender to work out a modification of their loan to bring down their payments. The principle remains, but the monthly payments go down typically 5 years. Finally the fourth option is a Short Sale. A short sale is simply a sale in which the sales price is less than the amount owed on the home. Home owners who don’t have the income to modify or desire to stay in their home should consider the Short Sale. If sold short, the homeowner can walk away with their head held high knowing they did the right thing. Their credit has been hurt, but will be able to buy again with an FHA Mortgage in 2 years when many think we will see a bottoming of home prices. They will not be responsible for the 1st mortgage and will have the opportunity to negotiate the 2nd or HELOC down to pennies on the dollar. So what does the future American Dream look like? I think it is job security, no debt, and happiness. What happened to the recent American Dream? Oversized houses, Large SUV’s, Disney Vacations and so on…

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