Thinking of walking

**p&t93** · 03-04-2009, 06:32 PM

We bought 5 acres and built a home a couple of years ago in CA. Before we were done with construction we needed more money to finish the house and were able to get a HELOC to finish construction. When we finished building our construction loan was converted to a permanent mortgage at a ridiculous interest rate. We immediately refinanced to a better rate, but we did not pull any equity out nor did we ever pull any additional fund out of our HELOC. We have been struggling the last 6 months and contacted CitiMortgage to try a modification. Our house has been on the market since October. In December they gave me a 3 month moratorium. I have been trying since December to ge ta modification and the best offer I have received is a 20% reduction for 3 months at the end of which a balloon payment would be due. Our moratorium will now be lifted and so we will be three months behind. It now seems to be the time to make the decision to walk and not seeing any convincing reason to try to work out an alternative scenerio. The bank wants a ton of info for a short sale or deed in lieu, with no guaruntee they will accept the offer or a bunch of money to even be considered for a modification. Is there something I have not considered? Any ideas or wisdom?

**p&t93** · 03-06-2009, 01:43 PM

I am not up on all of the lingo yet - what does purchase money mean and non-recourse purchase money financing mean?

I am trying to figure out our options and be educated in this decision!

**ProfessorShays** · 03-06-2009, 09:42 PM

A purchase money loan is a loan that was created at the time of purchase of the property and its proceeds were use to buy the property.

The key here is that under the laws of a few states in this country, purchase money loans on personal residences get characterized as "non-recourse" as long as they meet the other requirements (that vary from state to state). "Non-recourse" status means the borrower is not personally liable and therefore the lender's remedy is limited to foreclosure of the property and they can not sue the borrower for any shortfall (deficiency judgment).

Again, the law creating this limitation on personal liability is the state law in the state where the property is located.

Daniel

**Mylife** · 03-18-2009, 09:15 PM

I am no expert and have been unsuccessful so far, but from reading a lot of the post and successes that no large amount of money has never been required for them to do a mod. If they are going to do a mod they will put your behind payments at the end of the loan. Some involved making your taxes current. If a mod plan does not seem to be in the works for you they will try to **** the remaining money you have left. By now they have your income and bills so they know the amount of money you have to work with. It will always come down to a few questions.

Is the house going to be affordable after a decent mod?
Has the value dropped so much that you would have
to wait 10 years to break even?What could happen to your situation during that time?
Will your servicer ever start to use the new "Affordable Home Modification"program?
Is chapter 13 lien strip an option if all else fails?
Is the Mortgage Bankruptcy bill that is waiting on a senate vote help your situation? Can you rent the same house for half your modified payment and be better prepared should something get worse?

There are a hundred more questions we all need to ask ourselves during these times but the hard part is to be honest with the answers. Sweat equity,memories,embarrassment,moving,neighbors.
Your home to most people is a lot more than just a place to sleep. You can always think of a hundred reasons why you would like to
stay but there comes a time where you need to put real figures on another sheet and decide after 5-10 years where you would end up better. Sorry, you were most likely wishing for a Moderator reply. They will be by. Their replies are direct and to the point,no pipe dreams...just real paths to take. Good luck