Posted on: 08th Feb, 2010 05:41 pm
help! any advice on our dilemma will be really appreciated!
short version:
what are our options when we cannot afford to sign promissory notes for $30k and $17k on first and second mortgages respectively, which is most of the loss in the short sale? our bank, 5th 3rd, decided at the last minute we do not qualify for hardship and we should bear most of the loss in the sale of our mi home which is underwater about $80k. we wish to avoid foreclosure because we know we can be sued in the future for the loss.
long version:
we have a home we purchased in 2006 for $222,500. we were told it was a buyer's market, so even though our budget was tight and we weren't sure we would find a job and stay in michigan for more than 3 years, our realtor and our bank made it really easy for us first time home buyers. we were approved for a 5 arm, interest only loan and a 2nd mortgage to help pay our downpayment.
unfortunately we were unable to find suitable employment after the 3 year training period was over and we accepted a job in another state to start 7/09. we were deeply underwater so we listed our home in 5/09 as a short sale. we got an offer for $115,000 in july 2009 and have been waiting anxiously for the bank to approve our short sale. we have been current on our mortgage but barely. we were told in december that everything was "verbally approved" but that we would have to pay the entire second "piggy back" loan of $17,000 (which we had taken out since we couldn't afford to pay our downpayment. since purchasing the house, we have managed to pay half of our 2nd loan)
we signed a promissory note agreeing to pay the entire second note with the assumption at that our first note was forgiven, as we had been informed by our realtor. we also signed a purchase agreement and started planning a closing date.
however, we learned in january, a couple weeks ago, that we were not approved on the first note, and we had to sign a promissory note to pay most of the loss ($50k). they said since my husband's income increased since his new job, we no longer qualified for hardship. we have 0 savings and live paycheck to paycheck. and although we have been current we have put off lots of necessary expenses thinking it was a temporary situation. we have since fallen behind on our mortgage but it hasn't helped in our attempts to negotiate the amount. we cannot afford to add that loan to our existing debt. between cc loans and car loans and personal loans, our debt totals almost $200k.
although they have since reduced the payment to $30k, they are not willing to work with us and if we do not accept this they will deny the shortsale. however we cannot afford to pay $30k (more than 50% of the loss), plus the entire $17k of tahe second mortgage, on top of our existing debt. but we don't know what other option we have. how can we convince our bank, fifth third, to work with us since we really want to avoid foreclosure.
we have to make a decision this week. any help will be appreciated. i am expecting our 3rd child and this stress is making our situation at home very difficult. we want to work with our bank, but they are not willing to work with us even though foreclosure will hurt us both :(
short version:
what are our options when we cannot afford to sign promissory notes for $30k and $17k on first and second mortgages respectively, which is most of the loss in the short sale? our bank, 5th 3rd, decided at the last minute we do not qualify for hardship and we should bear most of the loss in the sale of our mi home which is underwater about $80k. we wish to avoid foreclosure because we know we can be sued in the future for the loss.
long version:
we have a home we purchased in 2006 for $222,500. we were told it was a buyer's market, so even though our budget was tight and we weren't sure we would find a job and stay in michigan for more than 3 years, our realtor and our bank made it really easy for us first time home buyers. we were approved for a 5 arm, interest only loan and a 2nd mortgage to help pay our downpayment.
unfortunately we were unable to find suitable employment after the 3 year training period was over and we accepted a job in another state to start 7/09. we were deeply underwater so we listed our home in 5/09 as a short sale. we got an offer for $115,000 in july 2009 and have been waiting anxiously for the bank to approve our short sale. we have been current on our mortgage but barely. we were told in december that everything was "verbally approved" but that we would have to pay the entire second "piggy back" loan of $17,000 (which we had taken out since we couldn't afford to pay our downpayment. since purchasing the house, we have managed to pay half of our 2nd loan)
we signed a promissory note agreeing to pay the entire second note with the assumption at that our first note was forgiven, as we had been informed by our realtor. we also signed a purchase agreement and started planning a closing date.
however, we learned in january, a couple weeks ago, that we were not approved on the first note, and we had to sign a promissory note to pay most of the loss ($50k). they said since my husband's income increased since his new job, we no longer qualified for hardship. we have 0 savings and live paycheck to paycheck. and although we have been current we have put off lots of necessary expenses thinking it was a temporary situation. we have since fallen behind on our mortgage but it hasn't helped in our attempts to negotiate the amount. we cannot afford to add that loan to our existing debt. between cc loans and car loans and personal loans, our debt totals almost $200k.
although they have since reduced the payment to $30k, they are not willing to work with us and if we do not accept this they will deny the shortsale. however we cannot afford to pay $30k (more than 50% of the loss), plus the entire $17k of tahe second mortgage, on top of our existing debt. but we don't know what other option we have. how can we convince our bank, fifth third, to work with us since we really want to avoid foreclosure.
we have to make a decision this week. any help will be appreciated. i am expecting our 3rd child and this stress is making our situation at home very difficult. we want to work with our bank, but they are not willing to work with us even though foreclosure will hurt us both :(
i forgot to mention, my name is hiba.
a quick follow up question. is a deed in lieu an option for us? can they come after us for the deficiency judgment or will the bank still ask us to pay the loss?
also, is it still possible to remove my name from the deed and the note since it is in both of our names?
thanks!
hiba
a quick follow up question. is a deed in lieu an option for us? can they come after us for the deficiency judgment or will the bank still ask us to pay the loss?
also, is it still possible to remove my name from the deed and the note since it is in both of our names?
thanks!
hiba