My wife and I purchased our home in Vallejo California in 2004. We are underwater on our loan and we are starting the process of trying to settle our second mortgage, while avoiding forclosure. Our plan is to continue paying the first mortagage and taxes, and stop paying the second. We will take the payment of the second mortgage, $1050, and put it in a savings account. We currently have around 13,500 in this account and figure the process may take a year, which should result in around 25K that could be used to settle. Our goal is to settle for 15% or less. Any help or guidence would be appreciated. Here are the key information:
We contacted Charter One in the loss mitigation department. We explained that we could no longer afford our second payment and wished to settle, not modify the mortgage. The phone # is 877-745-7366. The represanative said they would send out a packet that would include: DOD frank form, 4506T, include 2 months bank statements, 1 month pay stubs and sign all the docs. Also include a hardship letter with my offer.
- Purchase Price in 2004- 500,000
- Financed with 0 down 80/20 loan
- First- with B of A- current rate 3.0 (floats 2.25% over libor). Current on payrments. Monthly payment including tax/insurance= 2150. Balance 366,000.
- Second- Charter One (CCO)- fixed at 6.6%. Current, but we will not make the next payment due on 2/6. This, I assume is a recourse loan, as we refinanced the original purhchase money loan, for home improvements. The balance is 136,547
- Current Home value: Zillow estimate is at 270,000. OUCH!
Thank you in advance for any advice. I understand I have a tough road ahead!
Jon & Katie