Need help please!!!!
I live in florida.My wife and I love our home and would like to stay in it.The loans I am talking about is my primary residence and my wife and I are both on the loans.Both loans (primary and HELOC ) are with Wells Fargo. My current home value is about $275k but very ballpark price guess.A slightley smaller house across the street sold for 185k but it was a distressed sale.Another home sold for 315K but that was about 1 1/2 years ago. Not to many other comps to go on since real estate is pretty much dead hear.So our value could be more but probably less. I owe 204 on first. I got a HELOC for 300k about 4 years after I purchaced this home to have easy access to cash to buy investment properties back in the days prior to the bubble pop. So I pulled out all of the 300k and bought 2 properties. I was planning on flipping them, as you can guess I was not able to and ended up renting them. The value of both has plummeted and are both worth about 150k together. But I own them outright. I have already done a Deed in Lieu with chase on another investment property that was successful and only had small affect on my credit. I was able to get a mod for my primary residence through the HAMP program about 7 months ago. My hardship was loss of income.
So my problem is the HELOC. With the value of the investment properties at 150k,even if I sell them both I will still owe 150k that I will never be able to pay back. THe properties are both rented but with no real profit after the HELOC is paid (interest only) each month.I can afford the HELOC payment but interest only means I will never be able to pay it off.And I don't want this hanging over me and my family for the rest of my life. I am due to get a mod for the HELOC under the 2MP program but that has not come through yet. I tried to get a in house mod with Wells Fargo but they said I made too much. By the way, this was at the same time I was approved for the mod on my primary. So It did not make much sense why or how I could get a Hamp mod on primary but not a in house mod on second.I don't want a mod on the 2nd. I need to settle it.
My first missed payment for the HELOC will be this month. My wife and I are ready to let the house go if the bank is not willing to settle.I am fortunate enough to have a family member that will loan us up to 150k to settle the HELOC. But we must pay it back over the next few years and after we can sell the investment properties. I am willing to take on the tax consequenses of settleing the debt and getting the 1099 from it.
I don't think we have the option of bankruptcy do to the fact that we own these 2 investment properties outright.
We have obviously made some enormous financial mistakes over the years and are mentally exhausted with dealing with the banks in the past.
Has anyone heard of a similar case as this ? Do we have a chance at settling even if the second has some equity? At what point should I contact the bank for settlement. I know most people say ignore them until the charge off happens but since I think I have some equity that might not apply to me. Does anyone have any sugestions of what is the best way to handle this and get a settlement?
Any responses will be greatly apprieciated.