House underwater need advise

[Kmvguy83]

Ok here is my story
We have purchased the townhouse at south florida when the price was at the peak. This is our primary house and me and my wife moved in right after we got married.
House was 450k when we purchased it. I was at zillow yesterday and house value plunged, as of yesterday it said 288k.
We are making enough to pay the mortgage at the moment but because of the large sum of mortgage we do not have money saved up for our future, we've been married 2 1/2 yrs and it's scaring me to have a baby because we have nothing saved up for it.

Currently my 1st mortgage is arm and 7.5% adjustable. We are with countrywide (bank of america) And we also have second mortgage as well.

Would loan modification help us out?

What are the choices?

Please give me advise on what to do.

Thank you in advance
Phil

[SillyWorld]

To Qualify you need to add up some figures, say your mortgage is $400,000 to get any kind of Mod you would first figure if 38% or more of the Gross income of the person on the Mortgage is going to pay on mortgage payment. On the $400,000 say the 30yr payment is $3568.00 a month and your Gross is $6200.00 a month, $6200.00 times .38 = $2356.00 a month is what you should be paying, so since the payment is 3568.00 then yes you would be able to get some kind of Mod if it were possible, or lower if possible. BUT they can add a second mortgage like HELOC the monthly payment on top of the 2356.00 say the HELOC is 210.00 a month then your 38% would be 2356 + 210.00 = 2566.00 would be your monthly housing should be and that is including House Insurance and Taxes and escrow would be added to pay this if not already done

[faith]

Originally Posted by Kmvguy83

Ok here is my story
We have purchased the townhouse at south florida when the price was at the peak. This is our primary house and me and my wife moved in right after we got married.
House was 450k when we purchased it. I was at zillow yesterday and house value plunged, as of yesterday it said 288k.
We are making enough to pay the mortgage at the moment but because of the large sum of mortgage we do not have money saved up for our future, we've been married 2 1/2 yrs and it's scaring me to have a baby because we have nothing saved up for it.

Currently my 1st mortgage is arm and 7.5% adjustable. We are with countrywide (bank of america) And we also have second mortgage as well.

Would loan modification help us out?

What are the choices?

Please give me advise on what to do.

Thank you in advance
Phil

__________________________________________________ _____________

Hello,
You have to ask your lender if you can do a repayment plan, loan modification, special forbearance plan or you may want to consider selling your home called Short Sale, or give it back to the bank by giving them a Deed in Lieu of Foreclosure, or have it Foreclose, You have to write them a letter stating you are in financial hardship and can not afford to make payments. You can also call NACA to ask for their help. I’ve seen a lot of success story about it.

As far as short sale in Florida the lender must agree to sell the distressed property for less than the borrower owes on the mortgage. Since the lender accepts the short sale net proceeds as full satisfaction of the mortgage, the borrower is “forgiven” the difference between what was owed on the mortgage and the net proceeds of the short sale. That difference will be considered income by the IRS and taxed accordingly unless an exception applies. Make sure you ask CW to put in writing that the deficiency judgment is forgiven.

Under the Mortgage Forgiveness Debt Relief Act 2007 which is now extended through 2012, taxpayers who were forgiven part of their mortgage on their primary residence can likely avoid tax liability by including Form 982 with their tax return. You must have a purchased money mortgage and never refinanced or you are insolvent at the time of the sale of the house, must be your principal residence for 2 out of 5 years..

In Florida, the lender may obtain a deficiency judgment against the borrower for the difference between the sale price and the amount owed on the borrower’s loan. Lenders do not usually pursue deficiency judgments against the borrowers, unless the borrower has substantial assets, because lenders realize that the costs involved are more than they can probably collect against a borrower with no assets. Also, the lender does not want to spend time and money finding the borrower to serve them after they have moved out of the house.

In Florida, mortgages must be foreclosed by filing a lawsuit in court. Florida is unusual in that the state has passed few statues regulating foreclosures.

Thanks,

[Marshall Rosenbach Esq.]

Definitely pursue a loan modification! Also, look into the settlement between Countrywide and the Attorney General of Florida. You can find more information on the Florida Attorney General's website. Faith is right. Prepare your hardship letter, put together your financials, and submit your request. You should also ask for a principal balance reduction to the current market value ($288k) although it is unlikely Countrywide will agree to this. Also, I think an audit is helpful to see what, if any, Truth in Lending violations were committed which would give you more negotiating leverage.