Posted on: 03rd Feb, 2010 05:22 pm
I will try and keep the details brief and pertinent.
4 years into 30 year fixed loan @ 6.5%.
We put 30% down on the house, and despite recent price crashes the house still have positive equity.
Recently both my ex-wife and I lost our jobs....applied to Wells Fargo for HAMP modification and were approved.
I had to move out and go live with my new wife (baby on the way), my ex couldn't afford the mortgage and rented a cheaper place. We were able to find renters who pay exactly the modified rate.
Our problem is that we now realize that we need to be owner-occupiers to qualify, so the modification will likely be denied and we will be short each month by a sum of money that we will not be able to pay in total.
We are not behind on any payments, and until the modification process have always payed the full amount. Once the full payment kicks back in, then we will be in trouble for sure, being able to pay only part of the mortgage due.
I am looking for advice on what to do to sort out this problem before things get too bad to do anything.
Given the positive equity, I am scared that the bank would actually like our house back as they could probably get more in a sale than we owe on the place.
TIA.
Dave. :)
4 years into 30 year fixed loan @ 6.5%.
We put 30% down on the house, and despite recent price crashes the house still have positive equity.
Recently both my ex-wife and I lost our jobs....applied to Wells Fargo for HAMP modification and were approved.
I had to move out and go live with my new wife (baby on the way), my ex couldn't afford the mortgage and rented a cheaper place. We were able to find renters who pay exactly the modified rate.
Our problem is that we now realize that we need to be owner-occupiers to qualify, so the modification will likely be denied and we will be short each month by a sum of money that we will not be able to pay in total.
We are not behind on any payments, and until the modification process have always payed the full amount. Once the full payment kicks back in, then we will be in trouble for sure, being able to pay only part of the mortgage due.
I am looking for advice on what to do to sort out this problem before things get too bad to do anything.
Given the positive equity, I am scared that the bank would actually like our house back as they could probably get more in a sale than we owe on the place.
TIA.
Dave. :)
If you have positive equity, maybe it would make more sense to bite the bullet and sell it?
I don't have any other tricks or tips. From the stories I've heard, modifications are tricky and some of the people out their offering advice/service for a fee aren't to be trusted.
If I was in your shoes, I'd do my best to find a reputable lawyer with experience who might be able to help.
The one thing I don't understand is where the current process stands. Did you accept a trial modification and then move out? Or did you sign full modification papers and then move out? Technically, from what I understand, the modification changes the terms of your loan pretty much permanently. Once again, a lawyer would be the right person to read whatever you signed and provide the proper legal advice.
I don't have any other tricks or tips. From the stories I've heard, modifications are tricky and some of the people out their offering advice/service for a fee aren't to be trusted.
If I was in your shoes, I'd do my best to find a reputable lawyer with experience who might be able to help.
The one thing I don't understand is where the current process stands. Did you accept a trial modification and then move out? Or did you sign full modification papers and then move out? Technically, from what I understand, the modification changes the terms of your loan pretty much permanently. Once again, a lawyer would be the right person to read whatever you signed and provide the proper legal advice.
i have to think that howard's suggestion to sell the property makes sense to me, too. if you have equity in the home, regardless of it being owner-occupied or tenant-occupied, selling would seem to be something that could cure the problem.
what are the odds that the tenants could attempt to purchase from you? that might provide an ease of doing business that would make your whole outlook sunnier.
what are the odds that the tenants could attempt to purchase from you? that might provide an ease of doing business that would make your whole outlook sunnier.
Thanks for the replies so far. Selling would be the best answer, but difficult given the falt marker right now. Plus, I would be breaking the terms of the lease to market the hosue so soon after they have moved in (just 3 months to date).
Dave. :)
Dave. :)