I find myself in a possibly unique position. Bought a house in 2005 for $530K. I have a first through Suntrust (loan owned by Res. Funding) now at $390K at 6.25% and a second through GMAC (loan owned by Res Funding) for $100K at 7.5%. I saw that the second has a balloon payment in 15 years of $80K. I called GMAC a few months back and was told if I can't make the balloon payment the payments would continue at the amount and interest rate until satisfied. Today they said actually, no, the $80K will be due in total in 2020. I have been making additional payments (1 per year on each loan) and have never been late. Neither loan is FHA, HUD, or government guaranteed so I cannot refinance through the usual programs. Moreover, of course, the house in underwater.
So how can I refinance to lose the balloon or should I just walk away. Neither Suntrust nor GMAC offer any assistance. Right now I feel like to hell with them. I can't believe they will force me to default when I can continue paying but cannot get around that balloon. Why should I continue to pay on a house that I will ultimately lose in 9 years.
Any suggestions or advice?