Here is a tough one. Any help would be greatly appreciated!
My family has experienced job loss, health issues, and other family related issues to put us in some financial trouble. Fortunately, I have a job now and I want to save my houses if possible.
My wife and I have 3 mortgages on 2 properties:
Property 1 - Illinois primary home
Loan 1: 637K 2.25% interest only locked for next 2 years, then will go up max 2% per year. This was a modification made year ago from 5.75% interest only
but they added on 37K in principal balance. In foreclosure starting this month.
Loan 2: 95K 7% home equity 15 yr fixed, down from 8.325% modified 1 year ago. 60 days past due.
Current Value: 600K (underwater 132K)
Property 2 - Arizona Vacation home
Loan 3 - 350K 6.625% 380K (equity 30K). Forbearance plan complete to pay 5 months in a row, but NO NEW OFFER came even though they promised to offer a modification with a lowering of the fixed rate. 60 days past due
Here's the tough part:
My wife and I are getting divorced and we wanted to have a non-contested one where we agree on everything and come up with a mutually beneficial strategy for us and our 2 kids.
I strongly believe we should fight the foreclosure and go for the modifications including principal balance reduction and interest rate adjustments. Then she could live in the primary house with the kids and we can wait for the real estate market to come back a bit.
After considering this, my wife changed her tune on advice from her brother the attorney who wants her to go through Chapter 7 bankruptcy, and walk away from the houses. I cannot qualify for Chapter 7, so I think I would end up losing my houses, and being stuck with all the other debts if I do nothing. I am still trying to negotiate with her and get her to change her mind.
To say the least, I would not consent to that strategy. How can I defend against losing the houses without her signature?
Thanks again!
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