Foreclosure options: re-negotiate mortgage terms or leave and lease/option buy new home

 HEY-OYE staff has been advising homeowners to review carefully the alternatives to remedy their home having a "negative equity" (mortgage debt much greater than the current market value of their home). HEY-OYE staff have been advising homeowners to determine their home's current market value by: 1) going to their County or Municipal web site (tax appraisal or tax assesors files posted on line); 2) www.zilow.com or similar free web sites; and 3) Realtor Mulitiple Listing Services "home comparables" (available by linking with real estate brokers.) If the amount due on the mortgage loan is far in excess of the home's current market value (loan to value of over 25%), the homeowner should immediately conduct "good faith" negotiations with the Lender. If it appears unlikely that the Lender, or the Servicing Agent on the mortgage (not the ultimate owner of the loan) is unable or unwilling to substantially reduce the principal amount due on the loan (to correspond with the current fair market value of the house), the homeowner should contemplate abandoning the home. This is a hard decision since it will damage the credit of the homeowner, on top of the emotional trauma of leaving the home and losing: the downpayment; improvements to the home; and all other related closing costs and expenses. At HEY-OYE we are more about practical solutions than "hand holding". If the value of the home is 75% or less of the loan amount, why prolong the pain, we recommend to homeowners, cut your losses (continuing payments on the mortgage will not aliviate the outcome); lease a comparable home, and attempt to negotiate a option to purchase. HEY-OYE staff can quide the homeowner with all these steps, including minimizing the impact of their credit rating (negotiations with Lender involving the "deficiency judgement" and/or deed in lieu of foreclosure), and otherwise counsel with the lease/option negotiations and subsequent credit remediation steps. While the current Homeowners Relief Legislation in Congress could offer Lender's an avenue to re-negotiate some of these "under-water" mortgages, we caution homeowners to be prepared to "walk away", specially if it appears unlikely that the Lender is willing to take such a large reduction on the principal amount of the loan to match the current value of the home.