Keep house or not?

[bkstuff]

I have gone back and forth on this one....but really I think it is best for us to give up our house if we do a Ch13 or even if we do not file a Ch13. Here is the scenario:
- Home worth about 350 -370K. Bought home about 3+ years ago for $500K (put 100 K down on the home, so we owe now with past due amounts, etc about 410K on first mortgage. (almost 5 months behind due to reduced income, now getting more hours). Also we have an interest only ARM that is due to readjust in about 2 years. We now do not qualify for HAMP according to BOA)
- Took out a HELOC that we owe about 80K. (which we could strip if we kept home)
- If we kept the home, and filed CH13 we would have to do a 5 year plan. Our kids are teens now. Making this payment AND the trustee payment would make for a huge payment....they would get bigger percentage since house payment included in plan.
- Personally, my teen daughter has not been managing her chronic illness very well and I would prefer to cut back my full time hours and be home more during these teen years. Our marriage is suffering since I went back to full time work almost 2 years ago (because I am resentful that I get no help at home and feel exhausted all the time trying to do everything!)

Hubby thinks home prices will come back up within the 5 year period - I am not sure they would come up enough for us to be able to actually sell our home.

Done rambling. Thanks for listening

[SMinGA]

Have you contacted BofA to request an inhouse mod? (Not Hamp. Our process took ~6 weeks. Reduced APR, amortized missed payments.)

[SMinGA]

Here is what we did...

Had 30 year fixed 6.95% w/ Countrywide ---> Bank of America. Have not done an appraisal, if one was done my best guess is we'd come out somewhere between 10% and -10% equity.

Behind by 6 months - contacted BofA in April as our income has improved in recent months. (Income loss & rising expenses was our issue as well.)

Submitted tax returns, income stubs, bank statements, a hardship 'letter' to tell our situation, and a budget. (Budget was to show expenses as they were - must show a positive cash flow. I did not include payments to unsecured creditors, when BofA asked I explained that resolving the mortgage was my priority and I'd deal with the cards later, most likely by filing ch. 13 for partial repayment.)

Modified loan is 3.875% for 2 years, 4.375% for 2 years, and then goes to 4.75% permanently. Amortized interest from the missed payments.

[bkstuff]

yes we have. The most recent thing say's that our next options would be either a deed-in-lieu or short sale.

[bkstuff]

SMinGA, did you go through the office of the president to get help?

[SMinGA]

No. Called the retention department. 800-669-0102 I think, or something very similar.

SMinGA, did you go through the office of the president to get help?

[bkstuff]

Thank you for your responses

[freeatlast98]

No. Called the retention department. 800-669-0102 I think, or something very similar.

How did BofA come up with your new payment amount? Is it 31% of your income? How long is the new loan for? Just wondering because I'm dealing with them now. Also, was yours an in-house modification?

[SMinGA]

My original mortgage was under 31% of gross - which is why we did not qualify for HAMP so could only do inhouse. The loan ends the same as before: Dec. '36 is the end of our 30 year term. Mortgage payment is P+I+escrow for taxes & insurance. Not really sure how they decide what rate to offer. We did not get the best possible - I hear some are getting 2% for a few years, then up 1% til it reaches the new max rate.

How did BofA come up with your new payment amount? Is it 31% of your income? How long is the new loan for? Just wondering because I'm dealing with them now. Also, was yours an in-house modification?

[espo1357]

My original mortgage was under 31% of gross - which is why we did not qualify for HAMP so could only do inhouse. The loan ends the same as before: Dec. '36 is the end of our 30 year term. Mortgage payment is P+I+escrow for taxes & insurance. Not really sure how they decide what rate to offer. We did not get the best possible - I hear some are getting 2% for a few years, then up 1% til it reaches the new max rate.

I got the Hamp, its 2% for 5 years, and then it goes to 3% in year 6, 4% in year 7, and then stays at 5% for 25 years, with a 50k lump payment due at the end.

Right now, I am still over 100k upside down (hard to tell what my home is worth), despite the second being stripped.

Love my home, but not that much. I am serioulsy considering walking, and its probably the right move.

Sometimes its hard to see things clearly when you really like something, but you can't be stupid either.

[ColoradoBell]

I don't know anything about mortgages/new bill or anything really...but I wondered if you could find housing for your family for less than your first mortgage payment if you gave up your home.

Where I live, rents are so high that it seems that often paying the mortgage, even tho the house is technically under water, is lower than rent. (Plus, prices will come back someday if you can hold on wihtout getting further into debt)

I'm sure you already asked yourself that, but I guess I was wondering what the rental sitch is in other parts of the country since I'm in a similar sitch!
Good luck to you!

[bkstuff]

Hi,
Renting here for a decent 3-4 bedroom house would save us about $800/month. The house would not be as nice as our current home though (little extra touches). We are going to see how much our payment would be in a Ch13 and then decide. It may be worth it to stay here since we would probably need to file a 13 either which way since we have a second mortgage that we would still have to pay (we know this credit union does not waive deficiency balances).

[newbie2]

Hi,
Renting here for a decent 3-4 bedroom house would save us about $800/month. The house would not be as nice as our current home though (little extra touches). We are going to see how much our payment would be in a Ch13 and then decide. It may be worth it to stay here since we would probably need to file a 13 either which way since we have a second mortgage that we would still have to pay (we know this credit union does not waive deficiency balances).

The credit union wouldn't have a choice about waiving a deficiency balance if you include the 2nd mortgage in your BK. Chapter 7 would erase your responsibility to pay that 2nd mortgage. Chapter 13 could strip it (if you meet the value guidelines) and relieve you of the responsibility to pay it.