Any hope for my home?

[Amy26]

Alright, my home is in Virginia... in 2007 I purchased a condo for 239,900. At the time, I had 60,000 in equity and I used some of it to pay some bills. Mortgage total: 270,000. I have 2 mortgages: 1st is with Acacia 2nd is with my credit union.

Since I purchased the home in 2007 it has decreased in value by over 50%. It is a small condo development and more than 10 of the condos have been short saled and foreclosed in the last year for almost 120,000. Thus making my home worth ... absolutely nothing.

I have been unemployed due to a lay off since October 2008. So far, I've been borrowing from Peter to pay Paul and I'm current.

I tried to work with my lenders months ago but I stopped because of my second mortgage company refusal to work with me. They refused to allow a short sale saying they would not comply and they refused to let me give it back.

I've thought about bankruptcy but I'm afraid of being scrutinized and having some kind of misstep or short cut I took bite me in the ass. Nobody is perfect. I'm also afraid the second mortgage company will freak out and file an objection.

The Obama plan seems to suck totally. I basically qualify for nothing.

My questions are this:

1. What exactly happens in foreclosure? Will the second mortgage company come after me regardless of what I do? If they did, and they pass a judgement ... what exactly does that do to a person? I can't pay it...

2. Is there any company that would purchase both my second and first mortgage and put it into one payment? That way I could do a work out or short sell it? Would my first mortgage company do anything like that? I assume not because they would be assuming empty risk.

I really fail to figure out how a place with equity turns upside down by more than half in less than 2 years. Isn't it bad for the bank to own a property that isn't worth the paper its printed on?

I know people will say "you need to figure out what works best for you"... but I dunno what is best for me. I have no idea what to do and even legal advice isn't easy to come by without paying them money I don't have. ><

[Trixie007]

You can live there "rent free" until they foreclose and save money for moving expenses. The second is highly unlikely to foreclose, and they have until the SOL runs out to sue you for the deficiency (I don't know what that is in your state). Who knows if they actually will or not?

If you have something in your financial past that you are worried about, you could start living today with an eye on a future BK should it become necessary, and just hold out until they do sue you. Hopefully by then your books will be in good shape for filing.

[Amy26]

Well, I don't live in the house. I had to rent it out because I couldn't sell it. Had renters in there since December.

I mean with bankruptcy, how closely do they examine you? I mean I'm not squeeky clean... I may have said I made a little more than I did on a credit card application and I may have a charitable contribution on my tax return that I don't have a receipt for... I also have a credit card that is a "business" credit card and I don't have a business. I don't believe they ever asked me if in fact I did have a business but would that issue come up? I have a bunch of private student loans as well, are they gonna ask me what exactly I spent the money for those on? Do I have to have proof that so much went to to tuition/books etc?