On behalf of Law Offices of Mark M. Kratter, LLC on February 16, 2013
Connecticut homeowners with an underwater mortgage may soon see relief. March 1 begins a new program by Freddie Mac and Fannie Mae. The program will allow homeowners forced to stay in their homes because it isn't worth as much as they owe to move out and be relieved of their debt. This program could benefit those who are contemplating filing for bankruptcy.
Restrictions will apply to homeowners hoping to apply. Consumers must either be current on their mortgage or not over 90 days behind to apply. They must be paying over half of their monthly income towards the home and will be required to have a legitimate hardship forcing them to move. In addition, the home cannot be damaged and is required to be clean.
The program could help people who may have suffered a hardship such as a death, those seeking to find a better job or even military personnel forced to relocate. However, it is possible homeowners could be required to surrender a portion of their personal assets in order to meet some of the unpaid balance of the loan. With some residents thinking about filing for bankruptcy, the new program may be something worth considering.
Although it's certainly not a get out of debt free card, it could allow Connecticut homeowners to escape deep mortgage debt. People who could not escape their homes due to an underwater mortgage may now have the opportunity to finally move on and leave those homes behind. Those who cannot afford to apply for the program or who may not be qualified may still consider filing for bankruptcy. Doing so could help relieve them of their home burden and dismiss other debts.
Source: Yahoo! Finance, "Soon You Can Flee Your Underwater Home. But It Will Cost You," Justin Bachman, Jan. 29, 2013
