|
| | |||||||
| Register | Video Directory | FAQ | Donate | Members List | Calendar | Search | Today's Posts | Mark Forums Read | |
| Countrywide Home Loans - Tell Us Your Countrywide Story Countrywide Home Loans is now Bank of America. This forum is dedicated to tracking what Bank of America is doing to HELP struggling homeowners and how they are treating their customers. Good or bad, let your voice be heard and your story be known. |
This is a discussion on My story and my plan. Any advice? within the Countrywide Home Loans - Tell Us Your Countrywide Story forums, part of the Stop Foreclosure and Tell Us Your Story category; Hi! I found this forum last week and have found it very helpful. I think I have a pretty good ...
| | LinkBack | Thread Tools | Display Modes |
| | #1 (permalink) |
| Junior Member Join Date: Oct 2009 Location: Oakland, CA
Posts: 2
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | My story and my plan. Any advice? Hi! I found this forum last week and have found it very helpful. I think I have a pretty good handle on what my options are, but I thought I'd see if anyone had any suggestions. My story got pretty long. But, I do summarize my financial situation below after a big bold heading. I closed escrow 5 years ago, the day after Thanksgiving. My financing was 80/20. My house is now worth about 60% of what I paid. I refinanced the Heloc 3 years ago when the rate hit 9.5%. The value of my home had increased by over 20% and I added $10,000 in high interest credit card debt and still a bit below 80% LTV. (Oh the good ol' days!) I don't know for sure, but after reading a thread here, my guess is that that loan is not non-recourse. It's a 30 year fixed at 7.25%. The Countrywide/BoA first has been 5.25% interest only. It readjusts on December 1 to 1 year libor + 2.25%. Based on the current Libor, the rate will go down to 3.5%, but my payment will increase by $170. That would have been no problem if my husband hadn't lost his one stable client in June. Fortunately, I have a well paying stable job and we always cosidered his income our slush fund. But, it was also supposed to be the back up for Jan 1, 2010 when our first readjusted payment would be due. I have a lot of credit card debt and when the rate on one card caused my monthly payment to skyrocket, I took a loan on my 401K (at least I'm paying interest to myself). That's a $350 payment every month. And I still have $456 a month in credit card payments. Most of that is at permanent rates of 3.99% or 4.99%. But a BoA card now at 0% goes to 9.99% in April 2010 and another card's introductory rate goes up in April 2011. I've been playing the balance transfer game for years. Not as easy these days! Yes, I've made some bad decisions and have been living above my means for the last 20 years. Despite my best intentions 5 years ago, old credit card habits are hard to break. I did cut back. In the face of my increased mortgage payment, I've for the first time created a budget and a plan to have the credit cards paid off in 5.5 years (by paying only $50 per month over current minimum). It'll be tough, but if there are no big surprises, I think and hope we can scrape by. I'm current in all mortgage and debt payments. My biggest worry is the annual adjustment on my mortgagge. If I could just get a modification to a 40 year at 5% or 30 year at 4.25%, I could scrape by. But, I don't qualify for HAMP because the mortgage on my first is less than 31% of my gross income. So, here's the down and dirty: Monthly Gross Income: $6250 Current 1st mortgage + insurance & prop tax: $1707 1st mortgage + ins & tax beginning 1/1/10: $1886 2nd mortgage: $567 Monthly 401K secured loan: $303 Monthly credit card debt: $456 (+$50 to payoff in 5.5 yrs instead of 97 yrs at minimum payments!) Credit Rating: Around 750. Not too shabby... for now. Value of house: Approx. 60% less than when I bought it with 100% financing which I later added $10k to in refi of 2nd. I don't know who the investor is on my loan, but it's not FHA or Freddie Mac (or is that FannieMae?). I like my little 825 sq ft 1923 bungalow, 1/2 finished basement, big yard, roses and fig tree and don't have any desire to move. I am prepared to stay put at least until the value of my home slowly creeps up to what I owe. My plan after research on mortgage mods and credit card settlement: 1. Call BoA and tell them that I know I don't qualify for HAMP, but want to request an in-house mod. Isn't it in their best interest to immediately get a higher rate than they would as of Jan 1 and enable me to continue to pay my mortgage into the future and not default on my mortgage or BoA credit card? I've read enough on this forum to predict the likely answer. But, it's worth asking, right? When I'm not taken seriously by a phone rep. or their supervisor, maybe try an email to VP's office. 2. If that doesn't work (and even if it does), I do my best to keep to my budget and keep up on all payments. If I can't do that, my fist default will be on the BoA credit card because it's the one whose low rate expires first. Before default, I try to get BoA to lower the rate. Fat chance until I've been late for a while. Don't pay anything more until they offer an acceptable settlement (40-60% maybe). Let each credit card fall one by one. If mortgage rate goes too high next year, try for a mod again. 3. Consider bankruptcy, but only as last resort. I'd really appreciate any advice and input, especially about how to approach the bank. Also, I noticed on the loan app I signed at closing that the broker inflated my income even though I gave him my pay stubs (it was a no doc loan). How much leverage might that give me with the bank? I'm a paralegal and should know to review what I sign more carefully. Lessons learned: 1. Never again listen to real estate agents and mortgage brokers who tell you real estate values may level off, but never go down significantly, especially in the SF Bay Area, and you'll have no trouble refinancing in 5 years. And don't beleive them even after doing web research and finding out that the few people saying the bubble is going to pop and values are going to sink into Mariana's Trench are called "kooks." 2. Remember that you probably can actually manage another $100 a month for a 30 year fixed if YOU JUST WROTE A BUDGET! 3. Always listen to your mother when she says "take the fixed rate", especially if she'll probably help when you call her and say you're $100 short on your mortgage payment. 4. BUDGET BUDGET BUDGET!!!!!!! 5. Hindsight is 20/20! |
| | |
| | #2 (permalink) |
| Senior Member Join Date: Oct 2009
Posts: 60
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | Re: My story and my plan. Any advice? Why are you so against bankruptcy? Just curious, not that I think its a good idea. But once you start getting late payments, your credit will tank bad either way from what I hear. You may want to talk to an attorney to see if it is even an option. Tough situation that many share with you! I wish you the best of luck and keep us posted, we all learn from each other's experiences. |
| | |
| | #3 (permalink) |
| Senior Member Join Date: Jul 2009
Posts: 1,146
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | Re: My story and my plan. Any advice? I doubt she would pass the Means Test for Chap 7 $6250/month income with so she would be stuck with 13. And if only paying $4xx on credit card debt it can't be that much. ontheedge - very well organized layout and great lessons learned. On the other hand you are in far better shape than most of us here. The credit card and mortgage sides are totally different. The mortgage side could care less what you do with the credit cards I bet and vice versa. Your well organized logic isn't what the banks deal with only math formulas. Income too high no qualify especially with the relatively low payments on first. |
| | |
| | #4 (permalink) |
| Member Join Date: Sep 2009
Posts: 16
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | Re: My story and my plan. Any advice? Don't forget the nasty tax bill you'll receive on the balances of the credit card debt that you may get the bank to "forgive" in a settlement. The totals that you're talking about could carry a hefty price tag. It might be worth consulting with a tax accountant. |
| | |
| | #5 (permalink) |
| Senior Member Join Date: Feb 2008
Posts: 194
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | Re: My story and my plan. Any advice? Yes call the bank no need to say anything about HAMP just let them know that your back is up against the wall and what can they do for you. Your shooting for Lower interest rate, let them know that also go for 40 yr. term. If that does not get you anywhere then you need legal advise period. For Me it's called "Credit Gone Bad"! I would BK-13 1st mortgage-My house is now worth about 60% of what I paid. "Keep the House" 2nd mortgage: $567 this debit is unsecured/BK-13 to strip down to $0.00 Monthly credit card debt: $456-BK-13 Monthly 401K secured loan: $303 "Not Sure what I would do" Put if the other debit is gone you should be alright. Good Luck |
| | |
| | #6 (permalink) |
| Senior Member Join Date: Sep 2009 Location: Near Austin, TX
Posts: 789
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | Re: My story and my plan. Any advice? I agree with badbobmo. I would definitely try to get a loan modification first, consider talking to an attorney for the BK next. |
| | |
| | #7 (permalink) | |
| Senior Member Join Date: Jul 2009
Posts: 1,146
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | Re: My story and my plan. Any advice? Quote:
| |
| | |
| | #8 (permalink) | ||||
| Junior Member Join Date: Oct 2009 Location: Oakland, CA
Posts: 2
Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | Re: My story and my plan. Any advice? Thanks everybody for your responses. The belief that I should pay my debts and concern over how a BK will affect my husband's excellent credit rating. But the more I look at the possibility and the more numbers I crunch, the more I consider it as a real option, especially if I could strip the 2nd. After some research, I don't think it will hurt my husband's rating. I'll have to confirm that with an attorney. If my husband can't get a more stable client base or an actual job soon (he's trying to do both) his credit rating will not be as big a concern. Quote:
Quote:
Quote:
Quote:
I spent a lot of the weekend crunching numbers and getting paperwork together. I'll call BoA tomorrow. Regardless of what they say, I'm going to make an appointment for a consultation with a bankruptcy attorney too. I may need Chap 13 even if I get a mod. I'll post updates, at least on the mod request. | ||||
| | |
| Thread Tools | |
| Display Modes | |
| |