Loans, Debt & Credit - View Single Post - Sacto, CA - 2nd Loan = CW, Loan DEFAULT implications?

John316 · 12-23-2008, 10:09 AM

Thanks to the LoanSafe.org community - it's been very insightful! My first POST ...

In 2005 our home was purchased with 100% financing for ~$316k. 1st is $252k IO 6.5% with a 20 year repay starting in 2015 (+$550 P&I) -- INDYMAC. 2nd is $64k with a balloon of $53k in 2020 -- COUNTRYWIDE. Combined, we have a minimum monthly obligation of $2300.

What would happen if we stop paying on the COUNTRYWIDE 2nd ONLY?? Could we still keep the home? Is this considered a PURCHASE MONEY LOAN? If so, this could buy us some time to see how my wife's employment situation unfolds and if any legal settlement on the accident occurs. This won't likely happen until 2010/11 timeframe.

The home is 980 sq. ft. Bathrooms and kitchen problems make the home uncomfortable to live in, questionably safe and adds significant strife to daily living. We don't have the money to resolve the bathroom problems - currently estimated at $6,500.

We are first-time grandparents since Oct. 2007 -- Second one due April 2009! As such, we need to look at all options for big-picture decisions moving forward ... something has to give, been agressively pursuing ALL options to recover from HUGE debt and upside-down home ($316k vs FMV ~$178k) - only $200 / month for food, gas, etc. on a GOOD month. Wife's income at substantial risk & savings depleted due to a non-fault car accident she had.

Thoughts??

Thanks so much for anyone who took the time to read all this and even more so for your thoughtful feedback!

12-23-2008, 10:09 AM	#1 (permalink)
John316 Junior Member Join Date: Dec 2008 Posts: 2 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Sacto, CA - 2nd Loan = CW, Loan DEFAULT implications? Thanks to the LoanSafe.org community - it's been very insightful! My first POST ... In 2005 our home was purchased with 100% financing for ~$316k. 1st is $252k IO 6.5% with a 20 year repay starting in 2015 (+$550 P&I) -- INDYMAC. 2nd is $64k with a balloon of $53k in 2020 -- COUNTRYWIDE. Combined, we have a minimum monthly obligation of $2300. What would happen if we stop paying on the COUNTRYWIDE 2nd ONLY?? Could we still keep the home? Is this considered a PURCHASE MONEY LOAN? If so, this could buy us some time to see how my wife's employment situation unfolds and if any legal settlement on the accident occurs. This won't likely happen until 2010/11 timeframe. The home is 980 sq. ft. Bathrooms and kitchen problems make the home uncomfortable to live in, questionably safe and adds significant strife to daily living. We don't have the money to resolve the bathroom problems - currently estimated at $6,500. We are first-time grandparents since Oct. 2007 -- Second one due April 2009! As such, we need to look at all options for big-picture decisions moving forward ... something has to give, been agressively pursuing ALL options to recover from HUGE debt and upside-down home ($316k vs FMV ~$178k) - only $200 / month for food, gas, etc. on a GOOD month. Wife's income at substantial risk & savings depleted due to a non-fault car accident she had. Thoughts?? Thanks so much for anyone who took the time to read all this and even more so for your thoughtful feedback!