I Bought my place in GA with $0 down back in 2000 for $260,000. At the time I bought I was paying over 8%
but I was making over $100,000 per year so it wasn't really a problem. I took a new job after not working for over
a year in 2005, and that new job paid substantially less -- my mortgage + HoA + property tax amounted to over 2/3 of my take home pay.
I fell behind in my mortgage with Chase Manhattan and was told by them that the way to get 'caught up' was to stop making
payments then workup a loan modification.
After 5 months of torturous back and forth the modification finally happened the week before the place was going to
be auctioned at foreclosure. I was then paying 7 1/2%, still most of my take home pay going to keep the payments ( now with PMI ).
As an added 'bonus' Chase rolled up ~$10,000 on fees + missed payment back into the principal, taking most the equity I had put in since buying the place, so I still owe $250,000 on the property.
About 18 months ago, a close relative who had just gotten divorced offered to move in and takeover (most of ) the payments, so he moved in and I moved out. This worked out more or less OK, but I still have paid about $20,000 in payments since then.
Now he has told me that he intends to move out and find a cheaper place, and I don't blame him. The problem now is that
I have 6 months left on my current lease -- and paying the lease and the mortgage just isn't possible.
At this point I have a $250,000 loan left on a property I paid $260,000 for over 8 years ago. I could maybe get $235,000 for it right now, even then it wouldn't be a very fast sale.
Now I find myself having paid out about $175,000 over the last 8+ years on a property that I have no equity in, and looking
down the barrel of a payment that I can't make on a property I don't live in.
Under GA law, I know Chase can foreclose rather easily, and even go after me for a deficiency judgment,
which as I understand it, is 'rarely done'. I was therefore planning to let Chase know that I only plan to stay with the
property under a fairly aggressive loan modification. E.g. no payments until my lease expires in June, and then a temporary rate reduction to 4% for the next 5 years.
My questions are:
1) Is Chase in a 'bargaining' mood these days ? Do the terms I would propose have any chance of being accepted by Chase?
2) How likely is it that I will get hit up for a deficiency judgment if I just send the keys back to Chase ?
3) Is Chase's "Loss Mitigation" department the right place to call to start the negotiation process ?