We bought my condo right at the top of the market with 2% down-payment and 98% loan. It is a beutiful condo at a convenient location.
We stayed in the condo for 2 years and some more. Unfortunately, some medical condition in my family dictated that we need a far bigger place that what the condo provides.
We moved out our condo about 10 months ago to a rented accomodation and rented our own condo. The rent covers a little more than 50% of the condo expenses such as mortgage + taxes + soc dues etc.
As of now we can afford mortgage + rented condo. This is because (a) our rented condo is really small with bad condition = cheap rent and (b) we do not buy anything on credit so no bing monthly paymens to meet. Right now the only loans that I have are mortgage + car repayment. It is a mid-range car and we have already paid off substantial amount.
My current worry right now is (a) Moving to a rented place that provides enough space for the medical condition (b) Sending my child to private school. Public school story is turning out of be real sad (c) My son (1st grade) is excelling in one particular sport and it appears that I will be spending about 500 dollars a month very soon, just to provide him with right coaching. (d) Some saving for our retirement. We are looking at large scale problems after retirement due to medical issues.
Clearly (a) + (b) + (c) + (d) cannot be satisfied if I am paying for the Mortgage. However, there is no demonstrated inability to pay as well because we are skimping on stuff (public school, cheap rent etc)
Additional information: like an idiot I refinanced one year back with BOA to lower my interest rate (changed my mortgage from 30 year fixed to 3 year ARM). I was hoping that I could sell my condo in an year. The interest rate is getting reset in 2012 and it appears that it is going to be much much higher that what we are paying right now. On the other hand Bush tax cuts are expiring in 2012, so we are going to be screwed if we wait too long.
So we got hold of a realtor and approached BOA for a short sale. Provided all the documents that they initially asked for. There is no further response for the last 3 weeks. Realtor claims that he is following up with BOA every week.
I mentioned the possibility of skipping a mortgage payment or two. Realtor said it will negatively affect my chances of a short sale approval.
I have decided to foreclose if BOA does not approve the short sale and realtor is not happy with that.
I am approaching a lawyer but if someone could add any information that they already have
1. Will skipping a paymen or two bring BOA to the table?
2. My mortgage agreement has that deed-trust-something-something clause. In this case does BOA have an option of judicial / non-judicial foreclosure or whehter BOA has to do non-judicial foreclosure. Obviously i am trying to avoid deficiency judgement.
3. Any other issue that comes to your mind.
ps: I do not give a xxxx about my credit score. We have not bought anything on credit other than my house and my car. We are not planning to change this style.