What Can I do When I Owe More than My House is Worth?

Whether you live in Massachusettes or Montana, there are options to help homeowners in too deep.  Read what Marcia has to say, then if you would like to confidentially discuss your personal situation with me, please call, or email.  I'm glad to set up an appointment to visit in the comfort of your home about the options that may be available to you!

What Can I do When I Owe More than My House is Worth? 

It is estimated that as of the end of 2010, 23.1 percent of all U.S. homeowners with a mortgage owed more on their homes than their homes were worth.  So you’re certainly not alone!– And it may not be the end of the world.  Let us help you wade through your options and possibly learn of  resources and options that are available to you                      

 First and foremost – Did you plan on being in this house for 5 or more years and can youworries afford the mortgage?  If that is the case, there is a good chance that you will see equity increase over time and your short term worry may simply vanish over the next few years.   Possibly making improvements may increase the value more quickly, especially if you’re able to do the work yourself.   If the house is working for you, try to put market value aside for now.  Take a look in a few years and you may be pleasantly surprised! This market WILL turn around. In fact in some areas of the country and yes, in some areas of Massachusetts, we’re seeing some pockets of appreciation.


However, if you feel you can no longer afford your mortgage, and you’re feeling the weight of the situation on your shoulders, you may want to re-assess your next steps.  First – Has your situation changed since you initially took out the mortgage?   For instance, is there an illness, or has there been a job loss or job reduction, or was there a divorce or separation where one owner is no longer contributing to the mortgage? This life change is considered a Hardship and documenting that hardship for your lending institution may help your cause.   The important thing is to GET HELP NOW – Open those letters from your bank and talk to your lender about your situation.


Loan modifications can be sometimes worked out with your Lender and it’s worth the effort of documenting your situation and talking to the bank about your inability to proceed with the current mortgage.  Remember that most banks are inundated with requests and you will need to be strong and proactive – DON”T WAIT until you’re months behind – Your decisive action will demonstrate to the lender, your level of commitment to try to address your situation.  But if you simply don’t think you can proceed with this home, that over the long term the home is simply no longer affordable to you, a short sale may be your best option.




A short sale is defined as a sale of your home where the sale price is less than what is owed to the bank.  The bank must agree to this reduced price and your realtor and their team of professionals (possibly an attorney and/or a short sale negotiator)  will work with the bank to come to some resolution on price.  Once a price is agreed upon, you, the seller, will be forgiven the difference between the sale price and what is owed to the bank.  You are about to start your new life.   This process with the realtor and his/her team of professionals is paid for by the bank.  There is no cost to you.     


Avoid scams. Be careful of ads like  “We Buy Houses for Cash”  or “Avoid Foreclosure.” They may try to o convince you to sign over ownership as part of a complex refinancing arrangement.  They are trying to make a quick profit – or in some cases are actually trying to commit fraud. 


Consider your options -  The Mass Association of Realtors has a great flyer on avoiding foreclosures.  You can get a copy by clicking here.


Talk to a Realtor who understands your options – And can talk to you about how to proceed so you can get on with your life.    Call me so I can answer all your questions about this process.      smile

Marcia Kramarz

Your Key to MetroWest Real Estate



508 377 7171

Loss Mitigation Certified / Certified Distressed Property Expert 

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Comment balloon 8 commentsJenifer Lower • October 22 2011 04:16PM


Very good blog - many people are still confused

Posted by Lori Bowers, The Lori Bowers Group over 7 years ago

I cannot take credit for this one, just for reposting, you should visit Marcia and comment on her blog, she is more deserving of the comment :).

Posted by Jenifer Lower, Your Dream. Our Passion. (Bozeman Montana Real Estate .net) over 7 years ago

Thanks, Jennifer, for reblogging!   As your comments note - it is a subject that we understand, but consumers are still quite confused about!

Posted by Marcia Kramarz, CDPE,LMC,CBR (Re/Max Executive Realty) over 7 years ago

Marcia, My pleasure!  Thanks for taking the time to write it.

Posted by Jenifer Lower, Your Dream. Our Passion. (Bozeman Montana Real Estate .net) over 7 years ago

Hey Jenifer,  So many people are confused and do not know where to turn.  To often they get the wrong advice.

Posted by Will Hamm, "Where There's a Will, There's a Way!" (Hamm Homes) over 7 years ago

Will, I agree.  But even after we meet, I send them to a qualified accountant and attorney to review my opinions, it's never a good thing to give advice beyond how to market the home in these cases without backing it up by these professionals!

Posted by Jenifer Lower, Your Dream. Our Passion. (Bozeman Montana Real Estate .net) over 7 years ago

Jenifer ......great post and info!  I like the fact that you send them to an accountant and attorney.....many don't.
Hope you Have a Great Day!


Posted by Rob Thomas, Bristol TN-VA & Tri Cities Agent, ABR, GRI, e-Pro (Prestige Homes of The Tri Cities, Inc. CALL....423-341-6954) over 7 years ago

Rob, thanks for checking in!  It is a difficult time for folks and they latch on to anything, so some grounding advice from the RIGHT people is important, you just have to do alot of research to find one of each that knows anything about short sales.

Posted by Jenifer Lower, Your Dream. Our Passion. (Bozeman Montana Real Estate .net) over 7 years ago