The Nightmare Begins

[glennrah]

I am a 55 yr. old full time single Father of a 14 yr. old "Young Lady". My ex and I bought our house in 1998 for $106,000.00. The Mtg. then was
$97,000.00 at about 8%. We were divorced in 2001 and I continued paying my 1/2 of the Mtg. even though I was tossed out on the street with a restraining order. I was determined to keep my finger on the house as I didn't want to give her any excuse to sell the house out from under me. It is a 3br., 2ba., 6 blocks from the Beach in a very desireable location on the island of Venice, Island of Venice, Florida. South of Sarasota, on the Central West Coastl In 2003, ex decided to move out of the house and I was given a chance to buy her out and get my house back. Rates were low then and I was able to qualify for an ARM. The value of the house had increased substantially in the 5 years since it's purchase and so I needed to refinance to about "189,000.00 or so. The value of the house continued to increase and as my ARM would near readjusting I would cash out Equity to cover closing costs and penalty. I now know that it wasn't so smart, (1st Big Mistake), but I did this a couple of times, as the value and corresponding equity continued to increase. In June 2007 I did it again, but the idea this time was to get into a Fixed rate and get off the ARM Train. I got in touch with a Broker (2nd Big Mistake) who said that while she couldn't get me into my desired product at that time, she could put me in a product, which, if I made the payments for 8 Months, she then would be able to get me into a lower rate fixed and lower my monthly payment. The problem was that the product she offered was above my ability to make the payment. Her solution was to cash Equity out of the house and put it aside to augment my Salary and make the payment for the 8 Mo. period. I must admit to a great deal of anxiety about this but was "Assured" there would be no problem, Trust Me! I won't let you down! You have my cell # and I never give that out. YADA, YADA! (3rd BIG MISTAKE) I bought it. I did cash out $$ and put some into the house as it needed some roof work. The rest was put away and was used to pay the Mtg. Well guess what? Yeah I know, you already know. The 8 months was up this past March and by the timing of the Perfect Credit Storm, She was unable to qualify me for any loan and began NOT returning those promised phone calls. I then realized that I had been taken. The set aside $$ was almost gone but I got a very nice IRS refund which has helped me to continue making the payments which I can't really afford. George Bush's extra $900.00 also helped me to continue. I appealed to my ex for more child support which she did send. This is the only thing keeping my head above water, but just barely. I am unable, at the moment to, use her Child support $$ as income as there was not an actual Dollar amount listed in our Divorce. The amount was to be 1/2 of several specified expenses but we deliberately left out a specific amount because we thought that this amount would change over time, which indeed, it has. Mom moved to Chicago in 2005. I am now in the process of ammending our stipulation to reflect an actual Dollar amount and she has agreed to sign off on it.
Since the March debacle, I have been applying for and being turned down for many refinances. This has been driving down my credit score which stands currently at 686 which is still not too bad. My current Mtg. is an "Interest only" ARM at 7.375% (I was told that this would be a "fixed" by the Broker/Liar), with an interest only payment of $1,398.18. My loan amount is $227.500.00 and my house has been recently appraised for $310.000.00. I tried to go through the Modification program with the Lender (Accredited Home Lenders, San Diego, Ca.) It took them 2 months to finally tell me to "Take a Hike". During that waiting period, I had actually qualified for a refi but was hoping to avoid prepayment penalties and closing costs by keeping within the modification process, so I held the refi at arms length. By the time Accredited had finally turned me down, the loan guidlelines which I had been approved for had changed and I was no longer eligible for their refi. I am back to square 1, eating Xanax like M & Ms. I have been in the same job for 8 years and gross a little more than $31,000.00. I found this site last night and it reminded me of a site that was very helpful to me during my rather nasty divorce. Knowledge is power. I hope I can find the same type of support here. Well that's my story. Sorry it is so long and conveluted. Any encouraging words?
Many Thanks in advance
glennrah

[The Professor]

Encouragement is difficult to provide given your circumstances. Advice on the other hand is more easily provided. The key to making the correct decisions is being realistic. Let's face facts. $31,000/year income is an insufficient income to support a $227,500 debt. If the appraisal is accurate in reflecting the current fair market value of the property (you indicate $310,000), then you have the potential of saving some of the equity by selling the house. That should be your focal point. Sorry to be so blunt, but to provide you with anything but a realistic assessment based upon the information you've provided will only make matters worse down the road.

Daniel

[glennrah]

Any hope in securing any type of modification? I have so much blood, sweat, and tears, here, I just can't bare the thought of losing it.
glennrah

[The Professor]

Look objectively at your past actions and see where they have put you. There are things you have control of and things you do not have control of. An obvious one that you have no control of is which way the real estate market is headed. If I were a betting man, I'd side with those who think values are continue to slide until we hit a bottom. Three years ago I told my class (in the foreclosure course I teach) that based upon past market declines we would reach bottom in 2011. You know I have not changed that date. We will reach bottom when (and only when) home ownership is affordable as an effective alternative to renting. My guess is your $310,000 value will see another 10% decline in the next year. That effectively means you will lose $31,000 in equity which is what you make a year working.

It isn't about "blood, sweat, and tears." It is more about one of the songs by BS&T that I use to listen to. The lyrics went something like, "what goes up, must come down." We are living with the 'must,' and it will come down.

Daniel

[glennrah]

Professor,
I thank you for your frank assesment. I live in a very special place. It has been voted "one of the best places to retire in the country". With the Baby Boomers all retiring soon, I'm hoping to be there when the market goes back up. I have real Estate friends in this market that are telling me that values are already beginning to rise here. It is more than BS&T. I don't want to give a bargain to someone else now, when, If I can just hold on for a while, I could be the one to reap that benefit. I know that my past actions were not that bright. I'd like to think that I am brighter now. I am still able to make my payments and will be getting a raise in Jan. I know I'm just buying time, but that is exactly the point.
If I can figure a way to hold out for 5 years, I think I'll end up OK.
This is my HOME not just a building.
Thanks Again,
glennrah

[The Professor]

Know that all of our so-called Real Estate Friends have repeatedly said:

1. That real estate only goes up.
2. Now is the time to buy.
3. Don't worry, you will be able to refinance in two years when the loan readjusts.
4. All of the above.

Daniel

[Moe Bedard]

Hi glennrah,


Welcome to the forum and thank you for joining..................

Do you know why you were turned down for the modification when you tried the first time?

[glennrah]

Thanks again Prof.
These Real Estate friends are personal friends I've known in this area for almost 20 years. I must give them some credibility, though I do not doubt your veracity. Most have told me to hold on if at all possible and that is what I'm trying to do.

***,
I got nothing definitive from them, just that they would not modify. Many professionals I have talked to think that this makes no sense as foreclosure will lose them more money than a modification. I don't know what to listen to. Most of this sounds to me like people describing the internal workings of jet engines. I hear the words, but most of them don't make a lot of sense to me because of my limited scope of understanding. That is why I'm here, to learn.
Thank You as well,
glennrah

[Moe Bedard]

For a modification it would depend on the investor on your loan...........but for most of the modifications you would need to show a surplus.......

When you put together your household income versus your household expenses are you able to show a surplus of $100-$250 left at the end of the month............
also put together a hardship letter...........there are examples in the Homeowner Tool Box to the left of the forum...........

For Accredited to start the modification process you would need to call.....
1-877-273-4599
and specifically ask for the Loss Mitigation Dept.
from there you can discuss modification.............this might have been the route you took before.........but things are changing all of the time with investors on modifications.......so you might want to give it a try again..........

Please keep us posted on your progress.........

[glennrah]

***,
I have nearly a zero surplus, certainly less than $200. I did put together a hardship letter which was very similar to my original post, and it was addressed through their loss mitigation dept. I'm not above trying again though. Are there any advocates for modification who are not themselves, SLIME? Perhaps not. I did go through their refinance department prior to that and was advised by some "Smart Ass" 25 yr. old that after working at this place for 8 years, I should be making more money, or get a better job. Yeah, that's great if you're 25 and still "Moving -up". Not so easy when you are 55, divorced and the sole support for a 14 year old daughter. I just found the total lack of understanding or compassion of my situation appalling but very instructive into the mindsets I was most likely dealing with. Mostly SLIME! I do understand that things have been and are changing rapidly and so that is part of what keeps me going. Guidelines change every 5 Mins and rates change every 20 mins. It is part of the reason I still maintain some hope that If I just keep my eye on the prize and am persistant, things just may work out.
Thanks Again,
glennrah

[Moe Bedard]

There are two non profits that are not Slime...........

NACA
or

1-888-995-HOPE

or we offer modification services as well out of our attorneys office, with a free consultation to see if they can help..........click on the link for more info.......

Free Foreclosure Help - Loan Modification - Mortgage Help

I speak from experience when I say that I know exactly what you are going through.............raised my son myself since he was 9 months old.............he is now 24.........and it is not an easy task..........but you do what you got to do..........

[glennrah]

***.
I haven't tried or heard of NACA but I will contact them. I thought that the Hope people were sincere but lame at best. I have found that I have been given advice to default by at least 1 month before anyone will assist with a modification. No sense in trying to be pro-active. I don't want to screw up my credit by defaulting as I'm gonna have to try to put my daughter in college in 4 years. My credit score is currently 686 so it's not too bad and I don't want to flatten that tire. I was told that it is a lot like triage at a hospital. 2 patients are lying next to each other in the ER. 1 is bleeding out and the other is just about to, but hasn't yet. Who gets the help? The Worst Case 1st, then, if there is time and personnel, the other one (Me). I believe I was quoted a $3000.00 cost of going through your attorneys. The "free" consultation letting me know that it would cost me $3,000.00 for any action was not exactly comforting or Practical. If I had that kind of dough, I could pay 3 - 6 months of my current mtg. Does any of this sound familiar?
Thanks for your input,
glennrah