are we doing the right thing?

[shookj]

Hello - thank you for providing this service to those of us who are struggling to stay in our homes.

I am hoping for some advice and confirmation that we are doing the right thing with our mortgage.

Here is our story: we live in ct and have a 1st and 2nd with cw. the first is a 30 yr conventional jumbo with a fixed interest rate of 7.375%. the second is a 15 yr conventional at 7.125% on the second. we owe 396,000 on our home and had a realtor tell us that the value now is between 300,000 - 310,000 so basically we are "upside down" as they say. my husband is a builder and his income has been reduced substantially. we are now behind on nov, dec and now jan will be late after the 16th. we have tried to contact cw but they won't talk to you until you are 30, 60 days behind. we received a "notice of intent to accelerate" stating we had until jan 16 to pay current. right now we don't have any funds to cure the default. we have tried to contact cw at the loss mitigation number and several numbers they have provided but they all lead to the "home retention" dept. we can't get anyone at the loss mitigation department. in our ideal world we would like to combine the loans, reduce the interest rate, lower the payment and have them put the delinquent months to th end of the loan. we called a couple of days ago (thinking we are at the loss mitigation dept but think it was collection only) and gave them updated income and monthly expenses over the phone. the rep estimated we were -1,100 month and that are interest rates didn't qualify for a reduction at this time. they told us to contact HUD to help us negotiate down some of our monthly expenses ( we have cut our expenses as much as we can minus not eating for the next year). and if we can get our expenses to zero they "might" be able to help us. i did call Acorn which i found on the HUD website and have started filling out their paperwork. my husband is more patient then i and said we just have to wait and play their game. Here are my questions: how do we get to cw loss mitigation dept and have someone help us? do we continue and set up an appt with Acorn? at what point do we decide to cut our losses and walk away? unfortunately, i am emotionally attached to our property and am worried what to have to tell my 4 year old. any advice would be greatly appreciated.

[Dan Bailey]

Shookj,
Gald you found the forum and posted.


I would definately continue and set up an appointment with Acorn. You may also want to check out NACA, another non-profit that has been successful with CW mortgage holders. Either agency will help you get CWs attention beyond the "collections dept" phoneline nightmare.

Hang in there and good luck!

[cactus77727]

unfortunately, i am emotionally attached to our property and am worried what to have to tell my 4 year old.

I can't tell you how to do it, because everyone is different. But you have to find a way to separate the emotional attachments. And then think of your situation as strictly business strategy. Easier said than done, but that's just my take on it. I'm a little further on down the road in my walk so I can assure you, time heals the home sweet home attachments. I still get riled up when I think of all the hard work I've put into my house so far. But in my situation, I've got to let it go.

I don't have kids myself, but do have a little neice and a nephew. I believe that kids, when given the facts, are often better able to handle it than some of us adults. It's also in how you deliver the news.

[KT in CA]

We are missing our first payment this month, and will be offically late on the 17th. We are in an ARM that is going to adjust from $3000 to probably $4000 in August, plus we have a second that is $400 per month. We decided to cut our losses and let the house go. We are not attempting any kind of modification for a couple of reasons. Our lender is AmTrust Savings Bank. They would have to reduce our principal by about $200k to make it possible for us to stay, and there is no way they will do that. It seems like just one big run around. These lenders want the government to think they are "helping" but they aren't really. In my opinion, from the stories I've heard, they are just going through the motions. I'm not giving my bank any financial information. Nothing. We are done. We have had friends jump through hoops to give the bank everything they requested only to have their payment modified by $150 per month. Really? I'm not going through all that hassle.

We have lived her for 8 years. Have made some really great friends. Brought our younger daughter home from the hospital to this house. But you really do have to look at it as a business decision. Once we did that, it made it a whole lot easier. What is more important? Having food on your table, and being able to do things with your family, and enjoy your life, OR work to pay your mortgage? Donald Trump wouldn't keep an investment like my house, and we aren't either.

We have 2 girls. One is 12 and one is 5. My 12 year old is a little sad, but she really wants a bigger bedroom and to live in a 2-story house. So as long as we keep her in the same school she will be fine. The 5 year old doesn't really know what's going on. Just that we will be moving. She's very excited to have stairs in her new house. I'm trying to make it an adventure for them, while keeping their lives as stable as possible.

Just my 2 cents, but maybe it will help to hear a different perspective. Think of it not as a homeowner, but the CEO of your family finances.

Karen

[shookj]

dan - thank you for your reply. we will contact acorn. we don't have anything to loose at this point.

and, thank you to cactus77727 and karen for you words of encouragement. as horrible as the situation is for lots of people it is nice to know others are out there to help.

we will trudge forward and i am going to slowly un-attach myself. my family is too important to me.

thanks again

[Tanjen]

I feel like we are in the same situation as KT in CA. We also live in California and are $200,000 upside down on our home. We have a first and a second with GMAC (not sure who they are serviced by yet as we haven't missed a payment yet or called). My husband lost his job of over 11 years in November and we are living on less than half of our income. Our fear is that right now, we are making our payments, but know that in this economy (especially in California), we will not be able to live for long on the one income. Our loan is set to adjust November 2009. Because of my husband's three months severance (which we have managed to keep intact since he finally received it on 12/31), our self-impound, and about $8,000 which is our 16 year old son's "car money" that is sitting in our savings account, it looks like we are doing fine. In truth, once we start living on that money that is there, we will go through it very quickly. We will not use our son's money as he will need a car and he has put every bit of money into that account. All the bank is going to see is that we have a lot of money sitting in our savings account. I'm sure they won't care that that is our impound account for our taxes and insurance, months of severance that we are going to need to supplement the pitiful unemployment that my husband receives, and especially the fact that $8K of that is our son's. While I know the purpose of this site is to help homeowners work through a modification, I get the impression it is nearly impossible to do that. At the same time, today we have a very high credit score and if we are going to put ourselves in a position where we aren't able to even rent a home because of our credit hit after trying a modification and not having it work, we are having trouble understanding why we would take that risk? We MUST have a place to live and credit scores are considered when renting an apartment or a home. Shouldn't we, if our lender says we must be behind on payments before they talk to us about a loan modification, secure a rental home first and then stop making the payments. My brother in law (who works as a VP in Banking) told us to not miss a payment until we are ready with a rental. He said to try to do the modification first without missing a payment, but if they won't talk to us, we're thinking that that is what we have to do. Are we missing something? So many of these stories on here appear to be people who struggle with the runarounds from their lenders for MONTHS and then end up having the foreclosure anyway. I'm curious where are these people now living? Are they able to qualify as a renter with the foreclosure on their record? Sorry so many questions - so overwhelmed.

[cactus77727]

Tanjen
Im a walker in AZ. Just from my own experience, I regret terribly that I used up my savings, and pumped up my credit card balances trying to keep up on my mortage. I really wish I still had all that savings. I wasted it on 2 or 3 mortgage payments too many.

My suggestion to you is, don't delay in making the decision to fight or to walk. Get all the info and advice you can quickly, to preserve and make best use of the existing cash/resources you have available. Good luck and keep us posted on your story.

[KT in CA]

YES YES YES you can get a rental while in foreclosure. There are several people on this forum who have had no problems, especially when going through property management companies, in getting a rental. In fact, I inquired in my town and was told by 2 different agencies that it will be no problem as long as no other credit is affected. Basically, if they see that is the only thing going on and you are honest with them about it, it should be no problem. Don't stress about finding a rental. And no offense to your brother in law, but of course he's going to tell you to not miss a payment.

I don't know specifics about your loans. We are recourse due to refinancing, and are upside down by about $150k, maybe more. Have a first and second with same lender. Second is $55k. What happens with that I have no control over and will deal with it when the time comes. Yes we will have tax liability if we can't remove some of the deficiency income due to insolvency. We have about $40k in cc debt that I am not paying off until after foreclosure so I can use it towards the insolvency. Besides that we have an SUV that we still have a year to pay on and a travel trailer we are making payments on. My husband has about $26k in and IRA but that's all we have. No savings. No nothing. Hopefully insolvency will work for us. If not, then we'll pay the taxes one way or another and be done with it.

But back to your original question. Don't stress about it. Be honest and tell them what's going on when you apply for a rental. Most you may see asked of you is a co-signer, larger deposit, or additional months rent.

KT

[shookj]

Tanjen - sorry to hear your husband lost his job. this economy is wreaking havoc on many people. Just wanted to let you know that you should contact ACORN. They have a website and you can locate a local office. We have tried for 3 months to contact cw but can't get past their home retention dept aka collections. i have tried every number under the sun including ones i have found on the web. none work. unfortunately, we did have to take a hit on our good credit rating and miss a few payments. Acorn had us fill out an application and submit docs. They then have a counselor speak with you and come up with a counseling plan and then a proposal that Acorn's negotiator will send to your lenders negotiator. This is a free service. you aren't guaranteed anything with Acorn but at least you have someone on your side who can work with your lender if you have hit a wall. Good luck and hang in there.