I will like to hear from members regarding their suggestions/advice. I am a couple of months behind my mortgage payments due to layoffs on my job. I'm currently receiving unemployment but the amount is not even close to satisfy my monthly mortgage payments. I have been in constant touch with my mortgage servicer (Bank of America) to explain my situation. I applied for a modification but they refused me because they claim my debt to income ratio is high. Besides the mortgage and my student loans I donít have any credit card debts. Please note that I have only a first lien mortgage loan(one loan with a PMI---Private Mortgage Insurance Company). Secondly, Bank of America has notified my PMI company that I am in default on my mortgage. So, I recently received a letter from a company contracted by my PMI company that they will like to help me modify the loan so i should send them my documents and they will then review it, send a copy to the PMI company before eventually sending it to Bank of America to reapply for another modification. I do not want to waste my time because I know they will eventually decline my modification and very positive the PMI company is trying to reduce their financial loss.What if i refuse to send them the same financial documents that Bank of America refuse me with the mod application, will they be able to sue me by claiming i did not give them the opportunity to save the house? Secondly, will that make them to decline a short sale on the house if i decide to go that route?
The reality is that the house is about $145K underwater with no equity and don't anticipate equity in the house any time soon. Therefore, if the bank will not work with me to fulfill my obligation under the loan terms, then I have decided to walk away. The loan has a PMI, but I am not sure if the Private Mortgage Insurance(PMI) company will pay the lender if I deed the house, short sale or allow it to go to foreclosure. Any thoughts on this and will the PMI company be able to sue me for any deficiency?
The loan is not yet in foreclosure but the notice of intent to foreclose will expire in 12 days. I also contacted the lender(Bank of America) to do a deed in lieu but they suggested I do a short sale because they claim the deed-in -lieu will affect my credit negatively than a short sale. However, my gut feeling is telling me that may not be true and are only looking out for their own self interest. Which is good for my own interest- deed in lieu or short sale? Anybody has an advice based on their experiences?
Finally, I contacted an attorney but he suggested i file for bankruptcy. I explained to him that i don't have any debts besides my mortgage debts and student loans. Secondly, the student loans are not forgiven in bankruptcy courts and therefore will not file bankruptcy for a worthless house. Nevertheless, he was not happy to my response. Please give me an input based on what you know.