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New Program Released for Home Owners Underwater On Their Mortgages

Date Added: January 12, 2011 03:21:13 AM
An estimated 15 million American households have an underwater mortgage Their homes are worth less than their mortgages -- sometimes hundreds of thousands less. Many are making the painful decision to turn their keys over to the bank , bow their heads and walk away from their treasured homes and neighborhoods. It's a tough thing to do - to leave the home you love and admit to friends and family you've blown the biggest investment of your life. But for the many who owe too much to refinance through traditional means, the only option has until now been throwing away a fortune in mortgage payments, often at interest rates much higher than the current national average of 4.25%, paying for equity that no longer exists. But a new option offers homeowners carrying an upside down mortgage another choice. By strategically defaulting with Clean Slate Funding, it's possible to stay in your home, and buy it back later at a lower price. "We buy our client's home directly from the bank during foreclosure," says Clean Slate president Jason Hilborn, "we then rent it back to the homeowner close to what their previous housing costs were. After five years, we sell it back to the original homeowner close to price at foreclosure - an amount the owner can actually pay off. The 5 year lease is fixed and the re-purchase price determined at time of application" It’s a revolutionary, creative solution that makes financial sense, Hilborn says. "Our client gets to stay in the house they love, they don't have to move or ever tell anyone they entered a strategic default, and they can rid themselves a crippling debt load. In the long run, it equates to a smart financial decision." Clean Slate's program is not a solution for out-of-work people behind on their payments, rather it's for those with negative equity who have employment income, good credit and can afford their payments, it's a manageable way out of a predicament that could otherwise cost decades and hundreds of thousands of dollars. "Our situation looked hopeless," says James Schmidt, 39, of Bakersfield, CA. At the peak of the housing boom in 2006, he and his wife Elizabeth bought a beautifully restored two-storey home in the neighborhood where James grew up. The purchase price was $391,000. "The last appraisal we got was $170,000," James says. "That's negative equity of more than 220 grand, and it would have taken until I'm 75 to pay it off. It made me sick thinking about it. Two of our three kids are in school and have a great bunch of friends. The idea of just walking away broke our hearts and crushed our pride, but we were bracing for it." Then, while researching their options, the Schmidts discovered Clean Slate Funding. They applied online the same night, and were soon approved. A funder bought their house from the bank, and the Schmidts became renters with a five-year lease equal to their previous total housing costs of $1,950 a month. When the term ends, they will buy back their home at an agreed-upon price that will enable them to own it outright it sooner than they ever thought possible. "We'll have full title, mortgage-free just ten years later," says Elizabeth Schmidt with a bright smile. I feel like our whole future has been restored." Clean Slate Funding currently works only with Americans with principal residences in California, Nevada, Florida and Arizona. For more information or to apply, visit or call 1-877-305-8499.