Critics of loan modification wonder why homeowners would stay in a home when the mortgage is underwater or they are having trouble affording the payment. A recent article in the L.A. Times highlights one of the major reasons our firm helps homeowners seek loan modification – because they can’t afford to go anywhere else.
The rise in foreclosures has pushed millions of former homeowners with bad credit into a very competitive rental market nationwide, and especially in Southern California.
The article says the average monthly U.S. rent for apartments hit $1,008 in the first quarter, pushing past the all-time high set in the third quarter of 2008, according to the data firm RealFacts. USC’s Lusk Center for Real Estate forecasts a 10% jump in Los Angeles County rents over the next two years. In cities in the Inland Empire such as Riverside, San Bernardino, Ontario, Corona, Norco, Eastvale, Moreno Valley, Perris, Menifee, and Temecula, it is now cheaper to own a home than rent.
However, anyone who recently lost their home can’t take advantage of low interest rates and low prices to purchase in today’s market. Damaged credit means many must pay a premium or put down a bigger deposit to secure a rental. Therefore, it sometimes makes the most financial sense for homeowners to seek a loan modification.
With a loan modification, homeowners can lower their monthly payment below what they might pay in rent. They don’t have to come up with a pricey deposit. Most importantly, they can stay in their home and continue to enjoy the associated benefits of homeownership including tax benefits.
De Novo Law Firm can negotiate lower monthly mortgage payments, reduce principal balance, and extend loan terms to help keep you in your home. Contact us if you have suffered a financial hardship, have an adjustable rate loan, or have been unable to make payments on your loan for some other reason. Our office has performed loan remods with numerous lenders and we can help.