Motivation to Fight the Good Fight

Many beleaguered homeowners struggle to keep their homes so long, they leave no time or good options for themselves other than giving up and walking away in financial exhaustion.   For those who have considered or are presently entertaining a short sale of their home as an alternative to “walking away” (a/k/a foreclosure),  you have to be realistic about what you face after you walk away!

In an article in the New York Times entitled:  “Soaring Rents Drive a Boom in Apartments“, you might think that this is a good news/bad news scenario.    Boom in construction of apartments – good.    Soaring rents – bad.  “While rents are still rising, analysts say the steep increases between 2011 and 2012 are unlikely to be repeated as a surge of units are completed in the latter part of this year and will continue to come on the market early next year. Nationally, residential rents rose 4.2 percent in 2011, but only 3.6 percent so far this year  .  .   .”    But wait . . . . upon further review, the article also indicates that for many former homeowners, it is really a bad news/bad news scenario.   Most of today’s apartment construction is designed to accommodate 20 somethings looking for 1 or 2 bedrooms, not much living space, but lots of amenities.  This will not necessarily work for former homeowners with families and furnishings.

But even if a former homeowner decides to compete for a new age apartment unit with a new grad who is not ready to lay roots or be tied down to a mortgage, how will the credit report look for the one with the foreclosure and delinquent payments look?   Finding a good fit and a fair rental rate is challenging enough with good credit.   So do start looking for that perfect unit even before you reach the point of having to move out of your under water home!   But consider also the benefits of leaving your former home on your own terms – of short selling and being able to look your next landlord or rental manager in the eye and saying: “I did absolutely everything within my power to make my mortgage company whole when my house went underwater.   I could have walked away and saved time and hassle, but I fought to keep the house in good shape and to sell it for the highest possible price.”  Being able to talk about a financial hardship like loss of a job or major sickness is one thing and it will often gain some sympathy from a landlord.   But taking the time and effort to do a short sale rather than just “sticking it back to the lender” will show character and make the landlord more likely to take a chance on a less than stellar credit report.   It will also help you start the credit healing process sooner so that you can eventually bid on equal footing for a new lease or . . .  stop “paying the man” altogether and shop for a new mortgage!

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