Is it worth ponying up more money?

[echofoxtrot]

Hi all....I'm presently current on my mortgage payments, but, like everyone else, my two mortgages are upside down...I owe $52,000 on the first, $14,500 on the second (totaling $66,500), but my little condo is only worth $50,000-55,000. I could refy or modify (if they let me), but that would mean coming up with some extra cash (say, to pay off the second).

Is it worth going through all that expense to pay off the second? Or, would I just be throwing good money after bad? I plan on leaving in about one year....so I could just do the deed-in-lieu at that time. What do you think? Thanks very much.

[faith]

Originally Posted by echofoxtrot

Hi all....I'm presently current on my mortgage payments, but, like everyone else, my two mortgages are upside down...I owe $52,000 on the first, $14,500 on the second (totaling $66,500), but my little condo is only worth $50,000-55,000. I could refy or modify (if they let me), but that would mean coming up with some extra cash (say, to pay off the second).

Is it worth going through all that expense to pay off the second? Or, would I just be throwing good money after bad? I plan on leaving in about one year....so I could just do the deed-in-lieu at that time. What do you think? Thanks very much.

Welcome to this forum,
I think it's better to keep your money and save it for emergency instead of throwing good money after bad. Make sure that your bank where you have your checking or savings is a different bank from your mortgage company.

The Home Affordable Mortgage is for homeowners that are in financial hardship due to loss of job, divorce, disability and unable to afford to make their mortgage payments. Homeowners now find it very difficult to be approved for Loan Modifications, Refinance, etc. If you have a purchase money mortgage and never refinance you are protected by CA Section 580b, meaning the lenders can not pursue any deficiency judgment against you in the event of foreclosure, Short Sale or Deed in Lieu.

If you are planning to leave in a year, now is the time to do a Short Sale because it takes a long time to be approved by your lender, it takes a long time to get a buyer, make sure you list it with a real estate agent.

If you want to lower your monthly payments you can also do that now but you have to meet the guidelines


GUIDELINES FOR HOME AFFORDABLE MODIFICATION
1) Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.


2)Your most recent income tax return.


3)Information about your savings and other assets


4)Information about your first mortgage, such as your monthly mortgage statement.


5)Information about any second mortgage or home equity line of credit on the house.


6)Account balances and minimum monthly payments due on all of your credit cards.


7)Account balances and monthly payments on all your other debts such as student loans and car loans.


8)A completed Hardship Affidavitdescribing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.) if applicable.

Don't worry everything will be fine, the economy is slowly improving, in San Diego alone, home sales and home prices went up 11% for the months of June and July compare to May's record of 7%. They are now looking for sellers to sell their homes but people are not selling their homes, they are trying to hold on to it with a hope that the prices will go up and it is going up, slowly but surely.

God bless you and take care.

[echofoxtrot]

Thanks so much, Faith!!

Best regards,
Echo

[echofoxtrot]

Thanks again, Faith.

I should mention that I am in Colorado; they do permit deficency judgments. So I'll have to be more careful.

Thanks, and God bless,
Echo