It is estimated that one in seven homeowners in Temecula, Murrieta, and other portions of Riverside and San Diego Counties can no longer afford their mortgage payments and have stopped making them.
According to recent Temecula real estate market projections, each foreclosure costs the surrounding Temecula homeowners $5000 in property value.
In one of the first government initiatives that has a chance to help Temecula homeowners is the new programs to offer lenders who have “piggyback mortgages” an incentive to lower payments or eliminate the loans all together.
As part of its $75 billion foreclosure-prevention program the Obama administration has been offering lenders who made so-called “piggyback” mortgages incentives to lower payments or eliminate the loans entirely.
Second loans allowed consumers to make a little or no down payment and they were all the rage while property values were on the rise. Now, however, they are an obstacle to alleviating the housing crisis. That’s because piggyback lenders — fearing they won’t be repaid — can veto a borrower’s efforts to modify their primary mortgage.
The trouble with Obama’s offer is that no one was interested until Tuesday, when Bank of America (BOA) signed up. If more lenders follow Bank of America it could clear the way for more mortgage companies to cut borrowers’ principal balances on their primary loans, but administration officials appear wary of subsidizing such reductions with taxpayer money, because it could spark yet another backlash from critics who claim it’s unfair to people who are still paying their mortgages on time and a bailout for banks that made reckless loans.
But many experts say dramatic changes are needed. “Unless you modify principal, there is absolutely no hope of restructuring mortgages on a mass scale to keep people in their homes,” Daniel Alpert, managing director of the New York investment bank Westwood Capital LLC said earlier this month. “Eventually their hand will be forced.”
If you’re a homeowner with a “piggyback” mortgage, call or email us and we’ll try to help you figure out the best option for you to stop foreclosure. For more valuable homeowner information subscribe to the blog. To save or share with a friend, click on the button below.
Tags: Help for Homeowners, home affordable mortage program, stop foreclosure, Temecula Real Estate Market