Posted on: 01st Mar, 2008 01:04 pm
Currently along with many others... my business has gone into a stop. I am relying on my husband to handle our payments. we have a payoption and are only making our minimum payments and defaulting every month. I can not afford to make "big payments" Indy mac is our current mrtg and because we have NO LATES ...I have no help. We value our credit but at this point I am considering letting it go. We both have over 740 ficos and worked so hard...
what options do I have? Deed in Lieu of a good choice considering the situation??? :cry:
what options do I have? Deed in Lieu of a good choice considering the situation??? :cry:
I have been trying to work with my lender and they said there is nothing they can do. that is shortsale is my choice..then to notify them.
not sure what else to do. i owe 500k and there was a few short sales for 410k.
any advise?
not sure what else to do. i owe 500k and there was a few short sales for 410k.
any advise?
hi cynthia,
welcome back.
yes you will have to notify to your lender about the short sale.
" i owe 500k and there was a few short sales for 410k. " that means the due debt will be $90k. the lender may seek deficiency judgment. you may pay it on a monthly basis.
you can even get approved for a new mortgage after the short sale process within 18 months. if you go for a deed in lieu of foreclosure, then you won't have to pay the deficient amount which is a positive point. however, your credit score would get reduced by 250 points.
feel free to ask if you have any further questions.
best of luck,
larry
welcome back.
yes you will have to notify to your lender about the short sale.
" i owe 500k and there was a few short sales for 410k. " that means the due debt will be $90k. the lender may seek deficiency judgment. you may pay it on a monthly basis.
you can even get approved for a new mortgage after the short sale process within 18 months. if you go for a deed in lieu of foreclosure, then you won't have to pay the deficient amount which is a positive point. however, your credit score would get reduced by 250 points.
feel free to ask if you have any further questions.
best of luck,
larry
I don't knowyour age, but if you and your husband are 62 and over, you can possibly get rid of your loan through a reverse mortgage. They do not have qualifications based on credit, income or assets, and you have no mortgage payments.
There are many old myths about revese mortgages such as the bank owns the house, your heirs will get nothing...this stuff is malarky and is based on loans done over 25 years ago.
HUD/FHA/Congress have set up rules and guidelines to keep senior borrowers safe. BUT...as with all mortgages, you MUST go with an honest lender that can be checked out through various federal and business sources.
Also, the reverse mortgage is a lifesaver for some (although the costs are high and financed with the loan); but is not a good loan for others. It's worth it for seniors with home loan issues, or other credit issues to check it out. Even if you're in foreclosure.
About the high fees: Remember, this money is being borrowed and is not going to be paid back until the borrower dies or moves out of his home permanently. And, no one knows when that will be. That's a lot of risk for a lender. The insurance cost of 2% is what makes this such an expensive loan. However, if you want to remain in your home, have financial independence it's worth it. The insurance makes sure you receive your money if your bank goes out of business, and assures the bank they won't lose money.
And, yes, you will be using the equity in your home - that's the purpose of the loan: to allow seniors to use all the equity they paid for and the equity they DIDN't pay for - such as the huge appreciation over the last years, in order to live better, pay bills, stay in their home and have enough to live on.
There are many old myths about revese mortgages such as the bank owns the house, your heirs will get nothing...this stuff is malarky and is based on loans done over 25 years ago.
HUD/FHA/Congress have set up rules and guidelines to keep senior borrowers safe. BUT...as with all mortgages, you MUST go with an honest lender that can be checked out through various federal and business sources.
Also, the reverse mortgage is a lifesaver for some (although the costs are high and financed with the loan); but is not a good loan for others. It's worth it for seniors with home loan issues, or other credit issues to check it out. Even if you're in foreclosure.
About the high fees: Remember, this money is being borrowed and is not going to be paid back until the borrower dies or moves out of his home permanently. And, no one knows when that will be. That's a lot of risk for a lender. The insurance cost of 2% is what makes this such an expensive loan. However, if you want to remain in your home, have financial independence it's worth it. The insurance makes sure you receive your money if your bank goes out of business, and assures the bank they won't lose money.
And, yes, you will be using the equity in your home - that's the purpose of the loan: to allow seniors to use all the equity they paid for and the equity they DIDN't pay for - such as the huge appreciation over the last years, in order to live better, pay bills, stay in their home and have enough to live on.
Hi Cynthia,
Short sale can be an option in your case because you can repay at least 410K out of the total debt of 500K. The rest will either have to paid or canceled as per what the lender wants. Did you take the loan to buy the home? then you will not have to pay the tax on canceled debt as per the conditions for forgiveness .
Regards,
Jessica
Short sale can be an option in your case because you can repay at least 410K out of the total debt of 500K. The rest will either have to paid or canceled as per what the lender wants. Did you take the loan to buy the home? then you will not have to pay the tax on canceled debt as per the conditions for forgiveness .
Regards,
Jessica
Do you want to move? I am working with a older couple; they can get a reverse mortgage for all but $20,000 (including all costs, any past interest, etc. ) They are current now, but with the payment going up another $600, they won't be able t stay current). These people don't want to move; if they do a short sale, there will be no money for them to move. I have talked to the servicer ASC about a short payoff. And, they will not accept it. Why, I ask? Well, that's policy. I have asked to talk to the investor, but they won't give me the name. The borrowers have two choices - pay up, or go to foreclosure. No in-between, although it would be cheaper all the way around to do the short-payoff and have $20,000 on their credit report. Or a payment plan. And with a reverse mortgage 9at their age) and debt relief, they could pay b ack the $20,000 over time.
In this case the Servicer, has a big foreclosure department and will make money on the foreclosure, but not a short payoff.
They will not do forebearance or loan modification and blame the investor.
Are you dealing with a servicing company or the lender themselves? The lender may be willing to deal.
You are in a situation thousands find themselves in. I recommend you do not work with the servicing company, but find the actual investor and see what they will do. In my experience they are a bit more flexible since it's their money. However, whether you do a deed in lieu, foreclosure, BK or anything else - if you keep all your rent, and bills paid for 18-24 months afterward you will be able to (in the previous days) buy again.
In this case the Servicer, has a big foreclosure department and will make money on the foreclosure, but not a short payoff.
They will not do forebearance or loan modification and blame the investor.
Are you dealing with a servicing company or the lender themselves? The lender may be willing to deal.
You are in a situation thousands find themselves in. I recommend you do not work with the servicing company, but find the actual investor and see what they will do. In my experience they are a bit more flexible since it's their money. However, whether you do a deed in lieu, foreclosure, BK or anything else - if you keep all your rent, and bills paid for 18-24 months afterward you will be able to (in the previous days) buy again.
Hi Gloria,
It is true that different lenders have different policies and sometimes they cannot go beyond it, no matter, how much you try to convince them and negotiate.
But how do lenders make money on the foreclosure, I mean ok they might earn profit on the sale but does that not have any tax consequences on their part? Moreover, don't lenders lose money in foreclosure considering the fact that they have to arrange for the sale of the property?
It is true that different lenders have different policies and sometimes they cannot go beyond it, no matter, how much you try to convince them and negotiate.
But how do lenders make money on the foreclosure, I mean ok they might earn profit on the sale but does that not have any tax consequences on their part? Moreover, don't lenders lose money in foreclosure considering the fact that they have to arrange for the sale of the property?
I want deed in lieu of foreclosure. My property is underwater and my lender is Indymac. I want to get rid of the property and had applied for a deed in lieu. The lender was talking about loan modification.
Hi Juan,
If you want to get rid of the property, then deed in lieu is a better option for you. The lender has offered you the loan modification because he may have though that you want to save the property. I would suggest you to contact Indymac and apply for a deed in lieu of foreclosure.
However, you should note that a deed in lieu of foreclosure would reduce your credit score by 250 points whereas a loan modification will not affect your credit score much.
Thanks
If you want to get rid of the property, then deed in lieu is a better option for you. The lender has offered you the loan modification because he may have though that you want to save the property. I would suggest you to contact Indymac and apply for a deed in lieu of foreclosure.
However, you should note that a deed in lieu of foreclosure would reduce your credit score by 250 points whereas a loan modification will not affect your credit score much.
Thanks
google above subject, interesting.
my lender is indymac and i applied for a loan mod, which they turned down. i was told by money management that it was turned down, because i've never been late on payments. idymac has never gave me any answers in writing in regards to why i was turned down (even though i've asked several times). they give me a different answer every time i ask (i just get the run-around). they have told me it's still pending (from nearly 1 year ago), they have told me that i make too much money, they have told me my credit is over extended. i ask for alternate options (besides a loan mod), but they don't give me an answer.
here is my situation - i am about 40% upside down on my mortgage (not including the second mortgage on my house). i am overextended with liabilities as this mortgage has just been a huge sink-hole. i have never been late on any payments (mortgage payments or otherwise). i have student loans that have been in forbearance for nearly 2 years (my time is running out) and that is the only thing that has protected me from completely sinking.
i want to try to save my credit (if possible), because it could affect my career as employers are turning down employment these days due to bad credit standing.
i also have a second mortgage, which i hear makes it very difficult to get a short-sale. the second is with b of a.
any advice from someone who is a professional in the mortgage industry or who has a similar situation as me?
please advise / help!
here is my situation - i am about 40% upside down on my mortgage (not including the second mortgage on my house). i am overextended with liabilities as this mortgage has just been a huge sink-hole. i have never been late on any payments (mortgage payments or otherwise). i have student loans that have been in forbearance for nearly 2 years (my time is running out) and that is the only thing that has protected me from completely sinking.
i want to try to save my credit (if possible), because it could affect my career as employers are turning down employment these days due to bad credit standing.
i also have a second mortgage, which i hear makes it very difficult to get a short-sale. the second is with b of a.
any advice from someone who is a professional in the mortgage industry or who has a similar situation as me?
please advise / help!
Hi Ray,
Things would have been easier for you if your lender would have accepted the loan modification. However, you should contact your lender and check out if he accepts the short sale. In that case, though you'll be able to get rid of the property, you would be liable for paying the deficient amount to the first as well as the second lender. Moreover, it will lower your score by 75-100 points.
Things would have been easier for you if your lender would have accepted the loan modification. However, you should contact your lender and check out if he accepts the short sale. In that case, though you'll be able to get rid of the property, you would be liable for paying the deficient amount to the first as well as the second lender. Moreover, it will lower your score by 75-100 points.