| Same Old Story ... default & let it go, or try to be hopeful?
Hello, all ...
I just stumbled into this forum about a week ago, and am relieved to find that I am not alone, that we are all (or have been in) the same boat. I just need a little "off-the-hip" advice about what I should do in my situation ... let me elaborate:
Wife and I went bankrupt (Chapter 7) in late '04 ... rented a home for a few years, and decided to try to "catch the train" and buy a home in late '06 ... yes, we fell for the mortgage broker's line that "you need to get in on this wave, because the market's going 'nowhere but up', and you can refinance it in two years for a lower rate and probably have enough equity to pay off some debts, etc." That sounded good, because I wanted to be able to "ditch" the $25,000 in student loans I've dragged around since 2000. We could only qualify for an ARM loan because of the past bankruptcy, and we got one where we could do 95/5 ... I had to borrow about $13,000 from my IRA to be able to come up with the down payment.
We ended up with a townhome that cost us about $238,000, and we currently owe $225,000. Of course, the market tanked RIGHT after we bought it ... the recent appraisal claims it's worth about $205,000 and comparables on the same block are on sale for $189,000 to $192,000 ... and they're not selling. In fact, there's one across the street that they people are trying to do a short sale on, and it's listed for $169,000.
I think the 95% might be a 75/20 if I break it down ... I'll have to check. I know my main rate is 8.1%. Without adding property taxes ($1800/year) or HOA fees (also about 1800/year) we pay just under $1600 per month, and we have always had to STRUGGLE to do that ... in February of '09, our ARM "re-sets" and our payment will jump to an unmanageable $2175 a month ... IMPOSSIBLE for us to make that. We live in the Portland, Oregon area ...
I faxed in all the stuff that AHMSI needs to see to apply for a loan modification at the end of October, and they got back to me last week and said, "It's too early for you to apply for a loan mod ... you have to wait until closer to your "re-set", like the last week of December or the first part of January."
The rest of our bills are starting to fall behind now, as we still continue to make the mortgage payment the top priority. I notice here in these forums and in the paper, when you read about possible "Government" help, that people have to be at least 90 days late with mortgage payments to qualify for any serious help. WTF?? Is this true?
You may be able to see my dilemna ... do I make the December and January payments, and then put in for a loan mod again in the hope that AHMSI will gently set my loan on a velvet pillow and feed me peeled grapes? Because to make it work, they will have to drop the rate, make it a fixed permanent loan, and shave off at least $40-50K off the principal to make it align with what the home is worth. If they're just going to "jack me around" and give me offers I can't afford, then I will have to just "let the house go". If I am going to do THAT, I might as well stop paying the mortgage so we can catch up other bills and have a decent Christmas and start saving for whatever ... and then will I have to do a Chapter 13 bankruptcy, to avoid being sued for the difference?
...Or, do I still wait for the "increase" so I can have a more valid reason to stop paying the mortgage? Just not sure what to do here ...
...and here's another wrinkle ... the wife and I are contemplating divorce this Spring, after years of dysfunctional "train-wreck-style" marriage. How will that affect what I should be doing right now? Do ti try to get them to modify it in MY name alone, so only MY credit gets "whacked" if we let it go? I just don't know ...
Any advice any of y'all can throw my way would be greatly appreciated.
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