[tonia912]

My husband and I, like so many others, are in a subprime mtg with Indymac that is due to adjust in January. Our current rate is 8.375% and it will likely go up to 10%+. We are barely getting by as it is...we have cashed out various 401K plans and are using whatever credit we have left to get by. Our taxes are 2 qtrs behind and in Nov. we will owe over $6k+ in taxes alone. We also owe $2K in water/sewer charges. Somehow we have managed to never be delinquent on our mtg payments. Our credit scores are only 626 & 629. To make matters worst, I am facing a 25% company-wide paycut beginning this week. I have contacted several lenders about refinancing options and it seems that because of our debt to income ratio and credit scores we will not qualify for a conventional mtg. The only option would be FHA which would require mtg insurance equal to 1.5% of the loan, monthly pmi and rolling roughly 20K of outstanding debt into the mtg to reduce our debt to income ratio. I've called Indymac about loan modification; however, they tell me that because we haven't been delinquent in payments we can't be considered for loan modification. They suggest to hold on as long as possible or consider a short-sale. We need advice....what is the best scenario....refinance into an fha and incur the extra expenses associated or let the loan go delinquent and try for loan modification? One concern is that we let the loan go delinquent and then Indymac still does not modify the loan......Please Help