If you’re severely underwater on your mortgage, it’s likely you’ve considered stopping your mortgage payments and letting the bank foreclose on you. If so, you’re not alone by any stretch of the imagination.
My wife and I were in a similar position when we decided to stop paying the payments on an investment property we owned. It was an excruciating decision considering we have ALWAYS paid our bills on time no matter what. And now we we consciously choosing to not pay one of the most important bills we had.
So I understand what you’re going through…it’s a tough decision. But I discovered a program today that might make it easier for you to decide to stick it out. That is, of course, if you can afford to pay the monthly payments. Our payments were just draining our savings account, so it was simply a matter of time before we ran out of money anyway…
If you have the money to pay your payments and are considering a strategic default, you should look into a program called “Responsible Homeowner Reward”. It could provide you a financial reward simply for paying your payments on time and not defaulting. And, presumably, this reward could offset the amount you’re underwater.
How The Program Works
The program is sponsored and approved by your lender, but there’s no mortgage modification, sale, or shared equity involved…which means your lender should be more likely to approve your request.
Basically, here’s what happens:
- You apply and are approved for the program and an initial incentive amount.
- The incentive amount is set aside for you and as you pay payments on time every month, more money builds up in this account.
- During the first few months you’re in the program, you can earn additional incentive payments simply by making your payments on time.
- When you eventually sell, refinance, or pay the mortgage off, your lender pays you all the incentive payments you’ve accumulated over the years.
To get more information and see if you qualify, you should go to the Responsible Homeowner Reward website or call them at 888-697-4798. You can also visit their FAQ page.
The Program Does Not Provide Any Money Now
Remember…this is not a loan modification so your payments will not change. And you cannot get access to the incentive payments until you satisfy this mortgage by either selling, refinancing, or paying it off. This program does not give you additional money every month to help you pay your payments.
May 25th, 2010 at 8:20 am
It is nice to be updated how to save my home from foreclosure.