Posted on: 26th Dec, 2009 04:45 pm
We are in a unique and difficult situation. We have a huge mortgage (2.2million) on an unfinished house and have lost our jobs, we have been working piecing it together for the past year-18 months. The house is currently valued at 1-1.1million and it is not yet finished. (we were new construction when we lost our positions) We have been offered a position in Hawaii (we live in Boston) I would like to modify our mortgage down to 3-5k (from 14k/month) Move to hawaii for 5 years and rent. (and continue to pay for the Boston house) Rather than foreclose on our house I'd like to negotiate the mortgage down to 3-5k for 5 years, this will allow the housing market to hopefully bounce back, it will save our credit (if we like hawaii maybe we'll stay or if not return) We will maintain the property, rather than let an unfinished house deteriorate, and force the mortgage company to take at least a $1-1.8 million loss. In five years hopefully the house will be at value and we can sell it. Any thoughts on how to approach this? We are current on our payments but we can't continue like this.
You will have to write a hardship letter to your lender and let him know your financial crisis. You can request the lender to reduce your mortgage payments to 3-5k for 5 years and check out if the lender agrees to it. However, you've mentioned that you've lost your job. In that case, I doubt whether the lender will be ready to offer you a loan modification.
Thanks, we have a great offer of positions in Hawaii that will allow us to live comfortably (rent) and pay the 3-5k month (mortgage) and replete our savings. Hopefully this will buy us time for the housing market to turn around and then offer it for sale. (or move back if we don't like HI and can find positions again on the east coast). I'll start with the hardship letter...
you may want a face-to-face meeting with your lender, also. you're not speaking of a small loan, certainly. is your loan serviced by the original lender? is it a local institution? if all yes answers appear, you will be happier, as will they.
Thanks George, You are right it is a huge loan, the lender is Sovereign Bank, they were "stuck" with the construction mortgage when they took over a smaller local bank a few years ago. We turned the construction (interest only) last spring...to a full 30 y fixed at a great rate but we can't manage the payments in our current situation. Since it is so large would you advise hiring a consultant to negotiate for us?
Hi Stephanie,
You can yourself negotiate with your lender and request for a loan modification. A consultant can help you in negotiating with your lender provided you do not feel comfortable in dealing with your lender.
You can yourself negotiate with your lender and request for a loan modification. A consultant can help you in negotiating with your lender provided you do not feel comfortable in dealing with your lender.
a "consultant" may well be a good idea. be extremely careful in making that choice, however. there are probably millions of people who'd like to jump into that role so they can grab a large piece of your money pie.
sorry...bad metaphor there.
sorry...bad metaphor there.
So the Bank says they won't discuss the modification until we show proof of the new employment (we start in July). They also won't discuss it unless we continue to make payments. Not alot of sense..no job, moving to a different state don't have the money to pay currently (used up our savings) and they won't even discuss the modification until we can show them the first pay stub. Walking away seems at least easier. How long does a foreclosure keep us from getting a new mortgage? We'll have a high income and a very good reason for the foreclosure (loss of jobs and moved to a new state to get another one after a failed modification/and sale attempt)
thanks
thanks
stephanie, i know those reasons look "very good" to you, but i'm afraid that lenders look at things differently. i doubt you'd have much of a persuasive argument to take to the next lender, unless you have kept copious records reflecting your conversations with sovereign throughout this process.
i agree with you that their stance isn't exactly user-friendly, and that asking for pay stubs isn't sensible since you won't begin the new jobs until july. but of course, they want to know they're not spinning their wheels here.
if you can maintain the rest of your credit accounts during the course of this situation, you'll stand a much better chance of persuading some lender to work with you in the not too distant future. since you are also, obviously, not in the "conforming" market, but looking at the jumbo markets, you might just find someone to overlook the difficulties of the past and help you to move forward. let's hope so for your own sake.
i agree with you that their stance isn't exactly user-friendly, and that asking for pay stubs isn't sensible since you won't begin the new jobs until july. but of course, they want to know they're not spinning their wheels here.
if you can maintain the rest of your credit accounts during the course of this situation, you'll stand a much better chance of persuading some lender to work with you in the not too distant future. since you are also, obviously, not in the "conforming" market, but looking at the jumbo markets, you might just find someone to overlook the difficulties of the past and help you to move forward. let's hope so for your own sake.
Thanks George, Just frustrated. The rest of our accounts are in good standing and this is the first month we have ever not paid the mortgage. Trying to do the right thing. We have listed the house for sale, It would be awful to let it fall in disrepair, swimming pool, large salt water aquarium, huge walls of glass overlooking the ocean. Once the electric is turned off..sigh. Any suggestions on what we can do now to maintain/build our credit for the future as we go through this.
suggestions are probably not necessary for you. you already know what it would take to maintain and build credit, as you've been down that road already. it's simply a matter of keeping your payments on track, as you've always done (until this past month). if you can beg, borrow or [cringe] steal the money to bring yourselves current and maintain current status with others, that'll be a delight.
maybe there's a personal loan out there somewhere with your names on it. i don't know if anyone does 90-day notes any more but they're a great alternative for someone who probably can't pay every 30 days. shop around to see if you can get one. and, of course, there are "shylocks" out there too...not convinced anyone would actually call him or herself that, but you can check into it, by seeking "hard money" lenders. they're very expensive, but you seem to be running out of alternatives.
honestly, i don't have any better advice than all that - you know how to handle your finances, if i read you correctly, and it's now just a matter of cash on hand to continue doing that.
maybe there's a personal loan out there somewhere with your names on it. i don't know if anyone does 90-day notes any more but they're a great alternative for someone who probably can't pay every 30 days. shop around to see if you can get one. and, of course, there are "shylocks" out there too...not convinced anyone would actually call him or herself that, but you can check into it, by seeking "hard money" lenders. they're very expensive, but you seem to be running out of alternatives.
honestly, i don't have any better advice than all that - you know how to handle your finances, if i read you correctly, and it's now just a matter of cash on hand to continue doing that.
Thanks, we are fine with everything except the mortgage- or we can pay the mortgage and nothing else-- but with kids to feed it is tough to do that. We'll see where this takes us. At least we have an option-Thanks for your help