It happened in the 1990s. As we've all seen, it can happen again. Home values, usually temporarily, can dip below the balance of the mortgage or mortgages on the home. A home whose estimated value has fallen to $380,000 may conceivably be securing $390,000 in mortgages.



Should the homeowners run screaming into the night? Hardly. The first and perhaps most important thing to realize is that lenders almost invariably lose a lot of money if they foreclose. Foreclosure, therefore, is a last ditch effort to salvage at least a portion of the money owed to the lender.



Therefore, lenders are usually extremely ready to work out modified repayment programs with borrowers wherever necessary. In most cases, though it's just a matter of continuing to make the regular monthly payments, and over a relatively short period of time, the market value of the home will rise above the loan balance once again... and continue to rise.



It is particularly good, though, to check in with your lender if you face a time period in which it might be extremely difficult to meet your monthly payment obligation. Indeed, you should speak with your lender yourself before speaking to any services that promise to resolve these matters for you. If you do the communicating, you are most likely to end up with an agreement that works for you. For help call Beth at 425-450-5208.