I need some help and direction where to go next with our home. My wife and I purchased our lovely townhome at the peak of the market in 2006 in Florida none the less. We financed as an 80/20 both with First Franklin at the time, it has shuffled servicing a couple times and in the past year landed at B of A. We owe approximately 250k due to the fact both mortgages are balloons, our 6 years of timely payments have yet to touch the principle. The property is now worth about 115k. Yikes!
About 3 years ago we fell on hard times and accepted a loan modification, which was very temporary a 3 year fix. Our rates have since become adjustable again, and have plenty of room to grow. We are at 6.85% on the first and I believe the cap is around 14.99% they also deferred a balance of 65k as a non interest balloon. They payments are barely manageable. As in if we donít have any unexpected bills we can scrape by, but if something unforeseen arises or we simply choose to enjoy ourselves a bit we need to reach into savings. My concern is the subsequent adjustments will put us under on our budget and at some point we will need to perform maintenance, buy clothes, have medical bills, putting us further under. We have sharpened the craft of living frugally but the debt will become unsustainable. Furthermore I have had to take a position paying well under what I have made in the past.
We have not missed any payments, B of A is unwilling to discuss a loan modification, they said we make too much money for HAMP; this is not because we are rolling in it, but because of the second and liabilities HAMP does not account for. We are so confused and scared about what to do. My thought is to stop paying to finally get their attention and see what happens. We have also thought about trying a short sale, but what to do first.
If we are able to get a permanent mod on the first I would consider just stopping payment on the second, and attempting to settle it up with them. Does anyone know if b of a could still foreclose if we default on just the second.
I really wish I knew where to start.