• Tried to refinance but got turned down. Many homeowners with adjustable rate mortgages are trying to refinance but simply can’t qualify under stricter lender guidelines. When the housing market began to decline and lenders were forced to cut back or even close the doors altogether, it became much harder to get a loan. As such, homeowners aren’t getting the help they need. Loan modification, however, is proving a viable way to work out an agreement when refinancing isn’t possible.
• Suffered a hardship. Hey, life happens. Sometimes, there’s just nothing you can do. In this tough market, people are getting laid off from their jobs and have no means to pay their monthly mortgage. Others are dealing with the issues that pop up throughout life. Family illness, accidents that cause injuries, a decline in income and unexpected events are all legitimate reasons for falling behind on a mortgage that would otherwise be getting paid on time. Lenders are pretty open to workouts for hardships, especially when you show an ability to pay in the future. You’ll need a hardship letter as proof of your difficulty.
• Home value has dropped. With a declining market, many homeowners end up owing more than the home is actually worth. In many cases, loan modification may not be an option when you get upside down on your home loan. You may be better off with a short sale. We can help you determine which program is better for your situation.
• Simply can’t keep up with the mortgage. As the economy and individual markets suffer, many people are seeing once stable and predictable income decline to a point that they can’t afford their home any longer. It’s possible a mortgage loan modification agreement can be reached that would bring payments to a more affordable level. This is an especially attractive possibility if you can show your income will again rise to previous levels.

This is the advantage that a short sale presents and can be an especially attractive option when you’re looking to get rid of the home, but owe more than what you can sell it for. For this reason, short sales are skyrocketing in popularity and we’re sure to see more in the coming months.

The article can be read in its entirety at the wsj.com.