[HorribleWarning]

Hi all,

I posted on another forum all about my mortgage woes and a guy in FL responded to me, saying that he does loan mods. Great!

Just in case his services don't work out, however, here's the scoop on our situation.

We (husband and I) bought our house in 2004, for $535K with something like $110K down. We had sold our condo for a profit of $70K and we already had $40K equity in it aside from that, thanks to my dad, who had "gifted" us the down payment on our condo. So our original loan - which at that time was with Wells Fargo - was written for about $425K.

We currently make $112K or so. He's a teacher and I also work in the public sector - typically, our income goes up by about 4% per year. At the time we bought the house our income wasn't as high (and our credit scores weren't as good) so our broker talked us into what he referred to as a "pick-a-payment" mortgage. I had misgivings about it, as I was already starting to wonder how much longer home values could go up, but my husband dragged me into the broker's office to "talk some sense" into me. I can still remember the guy saying "Look, I own two houses with this kind of mortgage! This is how teachers build wealth!" The minimum payment was $1400, which worked well with our budget.

We figured we'd keep the loan for a year, MAX, then refi.

A few months later, my dad, who alone makes more than twice what we do and has no debt, demanded his $40K back. My husband also decided at that time to take out a little extra to help with living expenses over the summer.

You can probably see where this is going.

We now are in a situation where, according to an appraisal just done, the house is worth $520K, but we owe $470K on the first and now about $94K on the second. Our minimum monthly payment on the house is $2600, which includes property taxes impounded to the tune of $700/month and a 6.9% rate, which my husband bought down from whatever it was going to reset to this time; I'll have to ask. On the second, we pay $700/month at 8% interest. Total mortgage: $3300/month. We have a couple hundred extra left over at the end of the month.

Thankfully, our son turns 5 next month, which reduces our childcare bill by at least $100. Also, I just rolled all my credit card debt into one payment at the credit union, reducing that monthly bill by almost $300.

The loan mod guy I talked to today thinks he may be able to propose a fixed 6% for up to 7 years. This would bring the total P&I for the first to $2800/month, so by my calculations, adding in the payment for the second and property taxes would total about $3800. But at least no negative amortizaton. In 5-7 years I'm hoping the market has stabilized some.

Anyway, that's my story...