We Got 100% Financing On Our Home But Once the Loan Adjusts We Won’t Be Able to Afford it. – KC
KC wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, My husband and I have a 5/1 Adjustable Interest Only loan, as well as a HELOC loan because we did 100% financing. I’m no longer working (staying at home with new son), and my husband’s salary was recently cut 10%. We’ve given up a few luxuries (cable tv, saving for retirement, etc) in order to stay current on our mortgages, but once our rate adjusts in January I’m quite certain we’ll no longer be able to. Another factor is our home value is now nearly half of what we owe on it ($246,000 down from $455,000) Now that we have a child, our 2 bedroom home is getting to be too small. We’d like to move on from our starter home, especially to a better school district, but I think we’d be willing to stay in this home for 3 or 4 more years if we can get a modification that makes sense and saves our credit. So far, BofA doesn’t want to talk to us unless we’re delinquent. I’ve been considering going with MMI’s free counseling to help. Any thoughts on this? Are we so underwater now that we should look at walking away and going into foreclosure and possible bankruptcy ? Some friends in the same situation are doing this and I wonder what the consequences (besides poor credit for 10 years) would be. I don’t take this lightly. I understand we have an obligation to pay our loans, it’s just that as of January, we won’t be able to without sacrificing necessities. Your advice is appreciated! KC” Dear KC, You are so underwater on the loan that I doubt that Bank of America is going to come up with a loan modification plan. Unfortunately you are just part of the next wave of mortgages that are going to default. These option ARM loans are toxic and bad news. If housing values had doubled instead of dropped by half, you’d feel like a genius. But as it is you feel like a failure. Bankruptcy can be recovered from. The irony is that only by going bankrupt do you even have a shot at saving up money for a new home in the future. The shock to your credit report can be repaired. Unfortunately Congress never passed legislation that would have given bankruptcy judges the authority to drive down the mortgage balance to current values. If this had been your second or vacation home, they can do that already, just not on your primary residence. Crazy. You can certainly go and talk to any HUD approved housing counselor but at the same time you need to find a local bankruptcy attorney and make an appointment for a free bankruptcy consultation . You need to hear both sides of the story to understand which path is best for you. If I was to bet, I think you’ll decide that walking away from the home and starting over is the most logical path to follow. Big hug. Steve @GetOutOfDebtGuy Source: We Got 100% Financing On Our Home But Once the Loan Adjusts We Won’t Be Able to Afford it. – KC Other Related Articles to Read Mortgage Company Won’t Modify Loan Because it is an FHA. – Debora We Can’t Afford Our Mortgage and Bank of America Said They Can’t Help. – Anne I’m a Disabled Construction Worker in Oklahoma That is Being Chased by Bank of America. – Butch I Can’t Make the Mortgage and Feed the Kids. – Lill I’m Not Sure if Ocwen Will Modify My Mortgage. They Won’t Respond. – Rush Tweet This! Email this to a friend? Stumble upon something good? Share it on StumbleUpon Share this on Facebook Share this on Linkedin Seed this on Newsvine Share this on Technorati Share this on Tipd
We Are About to Lose Our Home and My Husband Won’t Talk to Me About It. – Jeanette
Jeanette wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, We are about to lose our home $10,000 in the hole my husband has not talked to me i just found out in the mail he takes care of the bills he lost his self employment is now working for someone else I know this is a big change for him a big pay cut I know things are on his mind bad he don’t talk just says there is alot on his mind my husband has done things for our family for 32 years I would like for him to know there is help how do we hold on. Jeanette” Dear Jeanette, These are difficult times for proud people. I suspect that your husband is stuck in the first stage of debt, denial. He sounds like he is working hard to try to make ends meet, probably so he does not disappoint you and let you down. There are two courses of action you could take. The first would be to sit down with him and let him know you are aware of what is going on. You would like to help to be part of the solution and you are willing to do whatever you can to work to find a solution for the problem. The second approach would be for you to get a copy of your consolidated credit report . The link is for the one I use myself and love. You could then uncover what the true condition of your financial situation is and sit down with that information and tell him you’ve got the facts and you are going to take over dealing with the creditors. I prefer the first approach. A solution based on communication and understanding works better than one based in confrontation. Once you do that, come back and give me an update in the comments section . I’ll help you from there but we need him onboard first before we explore solutions. Big hug. Steve @GetOutOfDebtGuy Source: We Are About to Lose Our Home and My Husband Won’t Talk to Me About It. – Jeanette Other Related Articles to Read I Can’t Make the Mortgage and Feed the Kids. – Lill I Cosigned for a Car Loan and that Person Went to Jail. Now I Have to Pay it. – Noname I’m Not Sure if Ocwen Will Modify My Mortgage. They Won’t Respond. – Rush My Fiance Left Me With His Bills. I Am Struggling to Get By. – Angela Will I Ever Be Able to Buy a House After My Bankruptcy and Foreclosure? – Michael Tweet This! Email this to a friend? Stumble upon something good? Share it on StumbleUpon Share this on Facebook Share this on Linkedin Seed this on Newsvine Share this on Technorati Share this on Tipd
I Can’t Make the Mortgage and Feed the Kids. – Lill
Lill wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, We are having problems making our mortgage payments and lot rent. We live in a modular home park and we are suppose to pay 21000.00 total for this place. The modular home appraised by the county is at 11,000 as I just found out not long ago. We pay 285 monthly lot rent and 295 monthly mortgage . We have to pay & keep home owners insurance ,plus we keep current on car insurance and of course all the utilities we pay. It has got so bad,that for the past year we have been really struggling. I have been borrowing money from family and friends, we have to do tons of cash advances to make payments. We are really hit hard by everything and we are barely keeping the electric on now & its even hard to afford groceries anymore, I just hit up the food banks and applied for foodstamps. I have 3 children with my husband who also currently pays child support on another child he has. I just got a free ride to college full time, but think I need to just let that go because we cant afford for me not to work. Which I was previously working but got a bright idea I would go to college so gave my notice. My husband thought he could pick up overtime to make up for it. Now the company insurance has gone up for the 4th time in 2 years,they are doing all kinds of pay cuts, cut out bonuses and raises and are not allowing overtime. We are not making as of now and we have been looking at bankruptcy and/or just letting them foreclose on the place. But I am afraid of what they can do to us after they foreclose? I also am afraid of not having any money to feed and cloth my kids trying to make payments and keep utilities on here. I am stuck what should we do and what can we do?I am just terrified, Lill” Dear Lill, Your situation sounds like a horrible experience to live through. Between the daily stress and future uncertainty, this is not the life you probably thought you’d be living. We have to prioritize your expenses at this point and make sure that you can pay for the health insurance and take care of the food for the family. While it might be better to let the mortgage go and go bankrupt, you’ll still need to find a place to live. Your mortgage and lot rent add up to $580 a month and it seems like your family income has really dropped that the housing payment is now way more than you can afford. It sounds like you’ve had some caring friends and family helping you out, but they can’t keep that up. It’s not fair to have them pouring money down a hole that is not going to get better without action on your part. If you can go back to work and you can find a place to stay or rent, bankruptcy probably is worth seriously investigating. Find a local bankruptcy attorney and go in and talk to them for free about your situation. The path out is probably this approach: Go bankrupt. Find new place to stay. Maintain insurance. Try and start saving some money after bankruptcy. Find new employment. Regroup life under this new fresh start and move forward. This unfortunate downward spiral is not going to change until you take specific action to alter the path. You must intervene. Big hug. Steve @GetOutOfDebtGuy Source: I Can’t Make the Mortgage and Feed the Kids. – Lill Other Related Articles to Read I’m Not Sure if Ocwen Will Modify My Mortgage. They Won’t Respond. – Rush My Fiance Left Me With His Bills. I Am Struggling to Get By. – Angela Banks, Wall Street, and Mortgage Companies Screwed Consumers And Now Want to Leave You Hanging Mortgage, Bankruptcy, Nonsense Our Monthly Income Has Dropped From 10K to 3K, Now What? – Maria Tweet This! Email this to a friend? Stumble upon something good? Share it on StumbleUpon Share this on Facebook Share this on Linkedin Seed this on Newsvine Share this on Technorati Share this on Tipd
