Due to a labor strike and my wife’s health problems, we fell behind on our mortgage, now the wolves are at our door. We attempted to go through a company that guaranteed to work with our lender but ended up getting ripped off, the offer they made to our mortgage company was the exact same offer the mortgage company made to us. We now have only 2 options left or we will be basically homeless. Offer 1 was made by an investment group. They pay our mortgage off, we make payments to them for 2 years then we refinance with them getting a large chuck of money from the refi. They claim we will come out ahead in the long run by getting a much lower interest rate than we have today. Offer 2 is similar to offer 1 except they don’t pay off the mortgage. They get us current then require us to make payment for 2 years. After 2 years we refinance with them getting a big chunk of cash and again we would supposedly save in the long run, lower interest rate on the refi. The only part that scares me with both if we fail to make 1 payment on time, they reserve the right to take over possession of the house and we would be on the street. The past week I have explored other options but the biggest problem is finding someplace else to live, no one will rent to someone that just went through a foreclosure. Bankruptcy was suggested but that just delays the inevitable.
We are cutting back to the bare necessities, cancelling cable internet, cell phones, and garbage service. I am preparing to sell off all my power tools and some hand tools, just keeping the basics. My wife sold her serger and is going to return a sewing machine her sister just bought for her. I am exploring working overtime at work, there hasn’t been much lately.
My question is, has anyone dealt with these types of lenders to save their house? I can find very little about them on the net. Any info would be greatly appreciated.
This may not be much help, but do you have a government loan (like FHA)? My information may be really really old and out of date, but 19 years ago, when my first wife died, I couldn’t afford the payments anymore and filed a “deed in lieu of foreclosure”. I don’t even know if they are possible/legal anymore, but I was able to quote a hardship clause and basically just give up my house to the government without actually going through foreclosure or bankruptcy. Back then, anyway, this was a much kinder option for my credit rating.
Again, this could be really crummy/obsolete advice, but it may at least bear looking into.
1: Depending on your local real estate market if you price your house aggressively you should be able to sell it quickly and not take too much of a haircut. Depending on the market you might even be able to make a little bit of money. Rent a small, less expensive place for a few years until you get back on your feet and your credit stays intact.
2: If you have an extra room you might also consider renting out that room to a college student.
racer72 - I hate to ask an obvious question, but have you asked your families for help? Perhaps they can loan you the money at no interest. If that’s not an option and foreclosure looks inevitable, could you sell the house? You’d lose the house but you wouldn’t have the foreclosure on your record, and any equity would help you into an apartment.
Unfortunately we owe about what the house is worth, I talked to a real estate agent last week. She suggest about $20,000 in repairs just to put it on the market. It would not sell for enough to pay the mortgage off. The house was a rental when we bought it and it has not had the upkeep it needed. My family is just a bunch of working class folks, no rich blood to borrow from. Right now we couldn’t pay them back anyway. I was offered a loan by a co-worker but I don’t have a way to pay him back. I use to have a nice retirement nest egg till my son in law, who was on our insurance policy without my knowledge, caused a 6 car pile up that destroyed a 2004 Hummer H1 and a 2002 Kenworth tractor. Can you say bye bye to my $125,000 I had in my retirement? Right now it seems everything in my life if screwed up and I just don’t see any light at the end of the tunnel.
I’m not an insurance expert, but I am curious, if he caused the accident how were they able to come after you personally after the policy limits were exhausted?
Delaying the inevitable might not be such a bad strategy at this point.
I’m no banking expert, but those financing options look pretty dodgy, and if information is nowhere to be found, then that just increases my suspicion. The first thing that popped into my head was you need to run those past a good real estate lawyer. Of course a lawyer bill is probably the last thing you need.
Can your wife get some kind of disability from social security?
Can you declare bankruptcy? I know in Canada they won’t take the house if it won’t pay off what you owe, and they won’t take away where you live. You can keep the house and lose al other debts, they arrange to make payments on the house again.
You would need to speak to a bankruptcy trustee where you live, but maybe consider it. You might be able to keep the house.
You would need to speak with a bankruptcy attorney, not a trustee. There are two types of bankruptcies for individuals that do not have huge amounts of debt, Chapters 7 and 13. Ch. 7 is what was most dramatically affected by the recent legislation, it is also what **Poysyn ** is coming close to describing with this huge caveat: If you were behind on your mortgage when you filed a Ch. 7 and you did not have substantial equity in your house, you most certainly could and probably would lose your house much the same way you would lose it had you not filed for bankruptcy (i.e. the mortgage company would foreclose after receiving approval from the Bankruptcy court to do so). If there was substantial equity in the home, then the Ch. 7 trustee might try to sell it to pay your creditors. Ch. 7 is not the way to save a house, Ch. 13 is. Ch. 13 does not necessarily delay the inevitable; it often leads to a tremendous recovery of the debtor’s financial condition. Besides, if foreclosure is inevitable then just let the house go now and save your time, effort and money. For what it’s worth, I am an attorney and I do practice bankruptcy law, but this is not legal advice, this is a friendly suggestion to consult with a bankruptcy attorney (consultations are generally free) in your state. Though it is federal law, many aspects vary widely state to state and state foreclosure proceedings are hardly fungible.
deeds in lieu of foreclosure are still used and have nothing to do with the status of the loan as a government guaranteed loan. you’re giving the bank the house back in exchange for them not foreclosing. this cna be beneficial for a variety of reasons.
I have not owned a house yet, however when I was really needing some finacial help I went to a Credit Union. They put me on a plan and are helping me to work on my credit.
They were also able to give me some very good advise as to who out there is on the up and up when it comes to dealing with “Guido” loans. CU’s are non-profit so they tend to want to help you out more than a bank.
Try contacting your local county social services or community action program. I used to work for a non-profit that administered a grant to prevent what’s happening to you right now. In addition to mortgage assistance they may be able to steer you to other programs that can help. There’s lots of stuff out there; the problem is finding the programs that work for you.