Is it easier to just go into foreclosure?

[eyeforlove]

Hello,

We have had a 1st and 2nd mortgage from Countrywide for just over 3 years. Between my husband and I we have had four job losses during this time. We have fallen behind and try to scrape up the money to pay just before the loan would be 30 days late. That didn't work in Jan of this year and got our first 30 days. We are coming up on another for April. Anyway, we have not been caught up on the loans since mid 2005. We have a large amount of other debt and at this point I am about to give up and let it go into forclosure. We have already been told we can't refinace 1. because of the 30 days late and 2. because we have no equity, as our 1st mortgage is Interest only. For the March 2008 payment I called CW to see if we could pay just the loan payment and not the taxes and insurance. They said I could, but now April is due and I haven't even paid back March's taxes and insurance. If we did not have to pay taxes and insurace our payment would be affordable

I have contacted the HOPE line for foreclosue prevention, I believe the Goverment endorsed this and they said Countrywide should be in touch. But from what I have read on these boards, Countrywide does not typically modify the loans. Although, I am not sure why... would they rather have this many foreclosures? I have talked to them about "hardship" repayment plan, but the repayment options seemed very unreasonable to us considering we haven't been able to get caught up, as is.

I am just trying to get a grasp on what our best options are. Here is our loan situation in a nutshell:
-1st morgage: 5.75% due to adjust 01/2010, currently 1x 30 days late, will be 2x30 days for April, this is Interest only and currently owe taxes and insurance payment (for March 08) and tons of late fees dating back to 2005.
-2nd mortgage: Variable rate, currently owe for April (due 4/20), but probably won't be able to pay until 5/19.
What can we due to avoid foreclosure and to get caught up?

Sorry so long. Any advice would be helpful!

[Moe Bedard]

Hi eyeforlove,

Welcom to the forum and thank you for joining................

It isn't that Countrywide is not modifying loans...........we have alot of CW successes in the Success Section............

The reality of the situation is that you are already at a low 5.75% rate for over a year and half more.........and it is interest only..............
When they modify loans the majority of the time they go with the start rate and then fully amortize the payment including Principle, Interest, Taxes, and Insurance...............it sounds like if 5.75% interest only is hard for you.........than a fully amortized payment would make your situation worse, not better.............and 5.75% interest only is a great rate........so it doesn't seem that a modification will help you..........

As far as foreclosing...........there are certain ramifications that go along with that..........and they are detrimental to credit.......
It is a personal decision that only you can make...........I would suggest that you think long and hard about it and also consult with an attorney and a good CPA on what exactly it will do given specific laws in your state.......
I wish I could give you better news.........

I hope everything works itself out for you........

[eyeforlove]

***,

Thanks for the quick reply. I guess one reason I think it wouldn't matter for foreclosue is that our credit has alreay been shot due to the 30 days lates. So at this point, credit is the least of my concerns.

Thank you, again!