Posted on: 26th Jun, 2008 05:22 am
hi,
i wanted to know if you could help me and my wife. we have an 80/20 mortgage with 2 separate mortgage companies and currently owe $245,461.01 on the first mortgage (at 7.3%)and $57,896.97 for the second mortgage (at 12.5%) for a total of $303,357.98. my problem is the houses on our street that are identical have sold recently for only $259,900 and we owe $43,457.98 more than we could even sell the house for. we are unable to pay both the 1st and 2nd mortgage due to our financial situation. we were wondering what would happen if we stopped paying the 2nd mortgage? we have tried to renegotiate with both mortgage companies and they refuse to do anything to help us. we have 3 small children and just are afraid of losing our home and a place to live. i hope you can give me some advice.
thank you,
ken
i wanted to know if you could help me and my wife. we have an 80/20 mortgage with 2 separate mortgage companies and currently owe $245,461.01 on the first mortgage (at 7.3%)and $57,896.97 for the second mortgage (at 12.5%) for a total of $303,357.98. my problem is the houses on our street that are identical have sold recently for only $259,900 and we owe $43,457.98 more than we could even sell the house for. we are unable to pay both the 1st and 2nd mortgage due to our financial situation. we were wondering what would happen if we stopped paying the 2nd mortgage? we have tried to renegotiate with both mortgage companies and they refuse to do anything to help us. we have 3 small children and just are afraid of losing our home and a place to live. i hope you can give me some advice.
thank you,
ken
hi phillyphillies,
i can understand what you must be going through in this situation. but i'm surprised to see that none of the lenders are ready to help. by the way, when you asked them for help, did you talk about a separate repayment plan which could help you pay off the loan faster? or did you speak about a loan modification?
is there any possibility that you sell off your home and rent elsewhere? i wouldn't say that you lose your home but at times you have to take tough decisions. so, if you are willing to rent, then you may sell off the property and pay off the mortgages. now in such a case, the second lender will be deprived of the full payoff amount since you owe $43,457.98 more than what the home can sell for. however, you can avoid paying this amount provided the laws in your state prohibit second mortgage lenders from asking for deficiency payment. so, where do you stay?
another way out of this problem is possibly filing a chapter 13 bankruptcy including both mortgages. at times, it is even better than a short sale. find out why chapter 13 is at times better than short sale .
good luck and let me what you think.
i can understand what you must be going through in this situation. but i'm surprised to see that none of the lenders are ready to help. by the way, when you asked them for help, did you talk about a separate repayment plan which could help you pay off the loan faster? or did you speak about a loan modification?
is there any possibility that you sell off your home and rent elsewhere? i wouldn't say that you lose your home but at times you have to take tough decisions. so, if you are willing to rent, then you may sell off the property and pay off the mortgages. now in such a case, the second lender will be deprived of the full payoff amount since you owe $43,457.98 more than what the home can sell for. however, you can avoid paying this amount provided the laws in your state prohibit second mortgage lenders from asking for deficiency payment. so, where do you stay?
another way out of this problem is possibly filing a chapter 13 bankruptcy including both mortgages. at times, it is even better than a short sale. find out why chapter 13 is at times better than short sale .
good luck and let me what you think.
hi phillyphillies(ken)
please try to contact both lenders again. even if you are not behind yet, it is very important to communicate with them. be sure you are reaching a representative within the loss mitigation department/workout department of your lenders. lenders have several options available to you to help you keep your home. repayment plan, loan modification, or forbearance. they will be able to tell you which workout plan that you qualify for. and they will be able to tell you why you don't qualify for whichever plan. if they are not giving you any reasons, then you certainly have not been reaching the right person at the mortgage company. please keep trying.
do you want to try to keep your home? or have you decided to sell? if you are choosing to sell, the short sale option is available to you. your lender can agree to accept less than what is owed. and usually the 2nd lien holder takes the bigger hit on that. if you choose the short sale option, be very sure that you get a realtor who is very experienced with short sales! the short sale process is different than just a regular sale.
try to be protecting the effects on your credit throughout all of this. do not stop paying on the 2nd mortgage if at all possible. any defaults/delinquency on either loan hurts your credit. and once you start missing payments, the mortgage company can choose to place you in foreclosure. a foreclosure is even more harmful on your credit. and a bankruptcy is even worse. the better standing you can keep your credit in during this time, the better position you will leave yourself with for the future.
if you are needing help talking to your lenders (if you are choosing to get some type of workout plan to stay in your home), please visit home-buddies.com and review the free step by step guide.
good luck in whichever decision you make.
please try to contact both lenders again. even if you are not behind yet, it is very important to communicate with them. be sure you are reaching a representative within the loss mitigation department/workout department of your lenders. lenders have several options available to you to help you keep your home. repayment plan, loan modification, or forbearance. they will be able to tell you which workout plan that you qualify for. and they will be able to tell you why you don't qualify for whichever plan. if they are not giving you any reasons, then you certainly have not been reaching the right person at the mortgage company. please keep trying.
do you want to try to keep your home? or have you decided to sell? if you are choosing to sell, the short sale option is available to you. your lender can agree to accept less than what is owed. and usually the 2nd lien holder takes the bigger hit on that. if you choose the short sale option, be very sure that you get a realtor who is very experienced with short sales! the short sale process is different than just a regular sale.
try to be protecting the effects on your credit throughout all of this. do not stop paying on the 2nd mortgage if at all possible. any defaults/delinquency on either loan hurts your credit. and once you start missing payments, the mortgage company can choose to place you in foreclosure. a foreclosure is even more harmful on your credit. and a bankruptcy is even worse. the better standing you can keep your credit in during this time, the better position you will leave yourself with for the future.
if you are needing help talking to your lenders (if you are choosing to get some type of workout plan to stay in your home), please visit home-buddies.com and review the free step by step guide.
good luck in whichever decision you make.
