Whether you have an adjustable rate or an option pay mortgage, given the significant decline in house values, you may soon be faced with becoming "underwater" --- that is, having negative equity in your house.

How do you deal with this problem? As widely reported, many houses are being foreclosed upon and the owners are being forced to give their homes up to the lenders.

Many lenders are willing to negotiate with you to try to restructure the mortgage loan. However, due to the volume of loans currently being handled, it is often difficult to reach the proper party at the lender to engage in such negotiations. Further, the information required for submission to the lender before negotiations can even take place may be voluminous (it typically represents the same information gathered for the original loan). The bottom line is that most individuals are not properly equipped to assemble this information in a way that is in their best interest for successfully negotiating a resolution to their mortgage loan problem.

Our firm has developed a relationship with an organization that will represent owners seeking to renegotiate their mortgages. They will assume the responsibility, for a fee, of contacting and negotiating with your lender and providing all of the information required. A recent actual example of a successful negotiation is as follows:

• Borrower had an "option pay" mortgage that had increased from its original amount of $225,000 to $242,450
• The original value of the house (i.e., the purchase price) was $250,000 but had recently appraised for $195,000, a decline of $55,000 (22%)
• The lender was about to initiate a foreclosure

As a result of the negotiation to restructure the original loan into a realistic repayment plan:

• The first mortgage loan was reduced to $139,000 (a reduction of $103,450) with a fixed rate over 30 years
• The lender agreed to an unsecured loan of $20,000, payable monthly over 20 years, with no interest

Therefore, a summary of the "before" and "after" negotiation position of the borrower shows a reduction in total debt of $83,450 and change from a negative equity position to a positive equity position, as shown below:

A former bank founder and president, Stephen Barnett fully understands the banking industry and has been highly successful in helping individuals and business owners protect their assets, refinance or restructure their loans, and obtain the financing they need to build and grow their businesses. Let his expertise help you. Call him today.