We are new to this forum and, like so many others in our area (Northern California) and across the country are looking for advice on how to proceed. Thanks is advance for any comments/suggestions.
2005: Bought house $1.218M, $170K down
2006: Refinanced for lower interest rate
Summer 2009: My husband and I were both furloughed, resulting in a 14 % decrease in my income and 7.5% decrease in my husband's income
Nov 2010: request for loan modification of 1st denied - reason given in letter was that WF was unable to give us a "monthly payment amount that would be affordable"; reason given by phone was that we had a surplus of $1200 (our financials show a deficit of $400). We have 3 rentals that we cannot sell in North Carolina, which basically break even, and we are thinking that this could be impacting the surplus/deficit calculation. We drive older cars with no/small car payment, but could get new cars (we need them), which would of course affect our fixed expenses.
Current Loan: 1st $924K, 30 yr fixed, 6.375% (Wells Fargo); 2nd HELOC $64K, 30 yr fixed, 7.75% (Chase)
Current market value: $800-$825
Current loan payment including PITI $7500/month, which is 31% of gross income.
Rentals in our area for a skightky smaller house would be in the $3000-3500 range.
We have never missed a payment on the mortgage or anything else and have good credit. We do have $12K of credit card debt, including the $5K of property taxes we just put on the credit card. We have good income and are lucky to have stable jobs, but the furloughs have made it difficult for us to save money for property taxes. We like the house but feel like we are throwing money away while the house continues to depreciate and we really are having trouble affording the mortgage.
Thanks for taking the time to read this . . . we appreciate having an opportunity to get feedback from other people dealing with this issue.