Not sure what to do

[lv0906]

Seeing as how everyone's story here is completely different and mine is no exception, I have decided to start a new thread of my own personal situation.

I purchased my home in 2005 at the height of the housing market. Luckily, I got into a pretty good loan. 30-year fixed, 5.875% interest rate, and had 29% equity down payment. At the time I was single and employed in a decent job.

Three years down the road my life has changed drastically. First, in December 2007 I got married. My husband is not on the original loan or deed. He has never owned a home himself.

Second, I was self-employed in commercial real estate which took a huge dive. I left this 100% commission (aka, no income) , full-time job in January 2008 in order to go back to school full-time to get my master's degree. Because I am a full time student, I could only accept part time employment. In May 2009 I lost my part-time job due to my contract not being renewed. I have not been able to get part-time employment yet. This means that my only source of income is from my husband's job and that is how we are paying my mortgage each month. I will not be completed with my master's degree until 2012.

Third, I live in Las Vegas. One of the top worst real estate markets in the nation. Over 40% of the 389-home community I live in is either in the foreclosure process or has sold out of foreclosure. In 2005 I purchased my property for $239,000. Today, three homes on my street have sold out of foreclosure between $80,000-$90,000 (the one right next door sold for $87,900 this month). My current loan amount on my first loan is $164,000. I also took out a second home equity line of credit through my credit union and the balance is around $11,000. Essentially I am $85,000 upside down on my mortgage based on these numbers.

We are current on all of our mortgage payments (Wells Fargo is the servicer, it is a Freddie Mac loan). However, with my husband having the only income and having school bills, we are losing money out of our savings every month. At this point we aren't really sure if it is worth it to keep throwing money at this house out of our savings each month considering how upside down we are. Do we cut our losses now or risk waiting out the down market for who knows how many years? Even if the market was to double in price, that still would barely cover the amount of our outstanding mortgage. And who is to say a lender would even give someone a loan based on the comps in our neighborhood?

This week I am attempting to set up a session with a hud approved counselor to discuss what my options are. I have called Wells Fargo twice to discuss the new federal program, both times I have missed the return calls and can't get anyone to call me back a second time.

Has anyone else faced a similar situation? How are you dealing? Etc?

[Evan Bedard]

Hi lv0906 welcome and thank you for joining our community.

I can personally tell you that there are many here on the forum in your similar situation. If you are calling Wells Fargo yourself be prepared to call at least once or more a week and hours and hours on the phone with them. To get a modification is sometimes difficult and you must be dedicated and prepare for hours and hours of phone conversations and the drag of (waiting on hold). Going through a HUD approved counseler is a good choice.

You can also find more information on the MHA guidelines here:

http://www.treas.gov/press/releases/...es_summary.pdf

[Moe Bedard]

Hello and welcome to the community!

Many of us have been in similar situations. Mine was back in 2002 and was the result of my own financial and personal issues. It is hard to seal with this, but the best thing you can do is just what you are doing and that is being active in finding solutions to your problems. From the looks of things, you are doing just that with your masters degree for the future and trying to find help with your mortgage.

As far as cutting your losses and walking away is something that you will need to decide. I would do the Ben Franklin and list the pluses and negatives of your LV hometown etc. From crime, to values and to the future.

Your home may take 10 years or never to get back to the current balance. But you will be paying it down as opposed to renting and never paying down anything.

Maybe you can negotiate a payment based on values at 90-100k and a payment of $1,000 with taxes and insurance. I have seen homeowners obtain rates as loan as 1-2%, so it is possible. But Fannie is tough.

Keep us posted on your progress with the HUD counselor.