Just don't see the point of paying...

[UpsideDownMommy]

Quick background: We paid $345 in 2006, it's worth $200. Our place is too small for our growing family. We can afford our mortgage but just don't see the point in paying anymore. It sounds better letting it go into foreclosure. living rent free as long as possible, pocketing the $ and walking away from it. We figure our credit will recover faster than the housing market.

The only way we'll stay is if the bank can somehow make it more affordable to do so and we can begin to pocket the savings (between current payment and new payment), so we can save the $ to get into something else and eventually rent our place. Ideally a loan mod so we can get the mortgage principle down, but a refi would be nice too. We're at 7%. We can't claim any life change or job issue, etc... ANY ADVICE? EDIT: Forgot to mention - we are with B of A, have first and line of credit (did an 80/20 loan with $0 down).

[Murray12]

Don't have to have a life change if you are late (for the HAMP program), but you also can't have more than 3 months savings.

[Chased around and around]

UpsideDownMommy, I feel for you, a lot of us are in the same boat.

I paid 535K 80/20 and now its worth 316K. No point in paying for nothing, cheaper to rent. In my area people are going 12-15 months with no payments then the banks are now working with them.

I have not seen as of yet a single principle reduction, only low interest rates for the first 5 years 3-4%, some loans are now 40 years.

In my area values will not be close to what I piad if ever for another 10 years IF the economy turns for the better. I don't see it turning around so the future does not good about keeping my condo...

[UpsideDownMommy]

Originally Posted by Murray12

Don't have to have a life change if you are late (for the HAMP program), but you also can't have more than 3 months savings.

We have no savings at this point. Earlier in this year my husband's job got cut back from full time to part time, so we were just getting by for a while. Now he has a new job but our income vs. mortgage is about 20% of our gross pay (do they figure it off net or gross?) so I didn't think they would re-fi us.

The guy I was talking to at B of A actually suggested (in a round about way) that I miss a payment, go into default and see if they can help me then. Seems crazy, but I went ahead and didn't pay August and am about to try to call them today to see what I can do.

[Chased around and around]

I have to say that the banks for the most part won't work with you when they see you are current. Its terrible that they push us to default, but they lay out the laws so why not use it on them...

[UpsideDownMommy]

Originally Posted by Chased around and around

I have to say that the banks for the most part won't work with you when they see you are current. Its terrible that they push us to default, but they lay out the laws so why not use it on them...

That's what the bank told me a couple weeks ago and why I purposefully missed our Aug 1 payment. I did call today - one department (I thought I called Loss Mitigation but apparently did not) told me that I had to wait till the 15th of August because there is a 15 day grace period and I'm not considered late until then. But right after that this person transferred me to the actual Loss Mitigation department who started the process for a Loan Mod, gave them all my monthly income and expenses info, and said I'd get a letter from them in 7-10 days with a request for my letter of hardship and proof of income. So who knows?!! Guess I'll wait and see now.

[Marylin360]

We're all in the same boat. Why is it the banks get to write off their losses (mark to market), while still being able to collect at the same rates from us for the next 25+ years? It's our investment, too, and we'll end up paying at least two and a half times the purchase price of the house over the life of the loan. Ultimately, homeowners stand to lose a lot more than the banks do in this market. Where's our bailout in this slump?? I feel like things are going to get a lot worse before they get better, too. Sorry, a little venting.

[UpsideDownMommy]

Originally Posted by Marylin360

We're all in the same boat. Why is it the banks get to write off their losses (mark to market), while still being able to collect at the same rates from us for the next 25+ years? It's our investment, too, and we'll end up paying at least two and a half times the purchase price of the house over the life of the loan. Ultimately, homeowners stand to lose a lot more than the banks do in this market. Where's our bailout in this slump?? I feel like things are going to get a lot worse before they get better, too. Sorry, a little venting.

Yes, I totally agree. I feel screwed a bit, but also a little dumb for buying in 2006. I, as well as everyone else that did it, had NO idea it would be THIS bad. It is my responsibility to deal with, but at the same time, I am trying to look at it as a financial investment that is my choice to either keep or dump and trying not to get emotionally attached to the situation. If I have to walk away from it, oh well. My family is more important than my credit report, but I worked so hard to get to almost an 800 FICO score, so this is not exactly the way I typically do things and I'm trying to wrap my head around it. Frustrating.

[Chased around and around]

Originally Posted by UpsideDownMommy

If I have to walk away from it, oh well. My family is more important than my credit report, but I worked so hard to get to almost an 800 FICO score, so this is not exactly the way I typically do things and I'm trying to wrap my head around it. Frustrating.

Your family is everything, FICO can be replaced. I filed BK in '93 and brought my mid score back up to 748 in 4 years. But I look at it this way, my excellent credit got me into this mess, I won't fall for it again. I am paying off CC and closing all accounts. For me I am done with credit, cash or nothing for me. If I lose this condo then its back to renting as I have done for the last 30 years.

You don't have to have your name on the banks mortgage paperwork to call it your home. A rental is still home and guess what, no taxes, no HOA, a lot less insurance, and no repairs. The tax right off meant nothing to me with this condo the last three years. I had to claim 7 on my W-4 just to make ends meet and still owed IRS every year, not worth it at least living where I do...

[UpsideDownMommy]

Originally Posted by Chased around and around

Your family is everything, FICO can be replaced. I filed BK in '93 and brought my mid score back up to 748 in 4 years. But I look at it this way, my excellent credit got me into this mess, I won't fall for it again. I am paying off CC and closing all accounts. For me I am done with credit, cash or nothing for me. If I lose this condo then its back to renting as I have done for the last 30 years.

You don't have to have your name on the banks mortgage paperwork to call it your home. A rental is still home and guess what, no taxes, no HOA, a lot less insurance, and no repairs. The tax right off meant nothing to me with this condo the last three years. I had to claim 7 on my W-4 just to make ends meet and still owed IRS every year, not worth it at least living where I do...

I agree. I'm in Los Angeles, so we're in the same boat. We thought it was a such a bright idea to buy so we'd have the write off in a year where I'd made an exceptional amount of money, but as it turns out we should have just paid the taxes! Oh well, live and learn!!!