Suggestions for Underwater?

[torwyn44]

Greetings,

In April 2007 my wife and I purchased a 7 year old home in Antioch, CA (Near Stockton,) for $510,000. At the time, the house was appraised by the assessor at $540,000. At this time, there didn’t seem to be any sign of a Mortgage Meltdown.

Our loans are 5 Year ARM @ 5.5 % for $408,000 with ING. We are paying interest only on the ARM. We have 30 Year Fixed HELOC @ 1% due in 5 years for $102,000 with National City for the balance. The ARM adjusts in 4 years. The HELOC is due 4 ½ years.

The houses in this area are being comp’ed right now for around $275,000. We are around $235,000 negative equity, (underwater.) We have lost around $265,000 (almost 50 %) in equity since we made the purchase.

We are barely able to make the interest only payment on the first. So it does not seem possible to pay down the loans under its current conditions. It is doubtful that we will have enough equity to refinance in 4 years when the ARM starts to adjust. The banks don’t want to do anything with us right now because we can afford the minimum payments.

To us, it seems we are just putting off the inevitable. We would like to work something out that would allow us to keep the house.

Do you have any advice for us?

Thanks

Joseph

[Dan Bailey]

torwyn,
Glad you found the forum and thank you for posting.
You could start by writing a hardship letter and requesting a mod with your mortgage servisor, ING. An example of how to do this can be found in the "Homeowners Toolbox" on the Home page of the forum. There are also good directions to further start the modification process in there.
If you feel you do not want to try and keep the home because of the declining vvalues, you should check out the "walking away/DIL" section of the forum. Prof. Shays has good insight on making thew decision.
Hang in there and good luck!

[torwyn44]

Dan,

We contacted both ING and National City back in September of 2008. National City responded with the 1% Mod, and ING just keeps blowing us off by saying our loan is with the closer, if they determine a mod is nessesary, they will contact you, etc. We have contantly hounded ING, but they are ignoring us. Beginning December 1, we decided to stop paying the loans. But we have not finalized our decision to walk away.

Someone told us, as long as we pay our loan on time, no one will listen to us. So we stopped paying.

National City Collections is hounding us now, but we have yet to hear a peep from ING.

I have sent Certified Letters to both ING and National City explaining our situation.

We are hoping maybe we can settle the loan with National City, so we could better focus on paying down ING.

Are these expectionations reasonable?

Thanks

Joe

[Dan Bailey]

Joe, keep hounding them.
As to expectaions being reasonable, unfortunately, what seems reasonable to us, and what the investors (who want to make every penny possible) see as "reasonable" are most likely two different things. But it is necessary to try.
Keep a running record of all correspondence, dates, times, etc.

[The Professor]

Thanks Dan for the vote of confidence. Yes Joe, you need to come over to the forum where I spend my available time. Be sure to head your title "underwater in Antioch." That will give you some idea via responses the decision a few of your neighbors have made when they respond to your posting......

[chooch]

Dan,

Unfortunately, you probably won't get anywhere until you are 90 days delinquent with ING. Otherwise, you are just another complaining customer. But, after 90 days, the mortgage secured bonds the investors hold on your house become "junk status." That is when they will be more likely to modify you.

[klarsson]

I keep an eye on the housing prices in Antioch. I moved from there in 2005 and sold my home for a whopping 640,000. I see the same home on California Moves for 310,000. Ouch. I am no better in Placer county where I paid 560,000 and my value now is 400,000. More ouch. I have been on time with payments however, just missed December and will miss Jan and Feb to get some help.

[The Professor]

klarsson:

Let me guess. Lincoln?

If I'm correct, recognize that you have lots of neighbors, including my own stepson who now wishes he'd taken my advice and keep renting when he chose to listen to the "experts" in 2005 and buy a new home in Lincoln.

Oh well. Maybe he'll be more appreciative of my advice in the future.

Daniel