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First, I'm posting here to see if anyone has any good sound advice. I'm not posting here to hear about any judgements you may or may not make about me, my family or my situation. It is heartwretching to hear how so many are so judgemental about people in my situation. I will tell you my story so that you have a clear picture.
My husband and I purchased our first home on Long Island in 2005. We had been renting, first in a house in Queens and then a house in Hicksville. We moved from Queens for two reasons.. the main one being that our landlord had decided to sell the house and we heard a knock at the door with his mother from around the corner wanting to "show" the home to an interested party (it was NOT on the market yet and he had mentioned wanting to sell..but not officially). So, with that we said.. it's time to move. We really started to not like the neighborhood AT ALL.. We have NO problems with other races or religions, but when you live in a neighborhood where you are the odd one out you start to feel uncomfortable. THat, and all you could smell no my block was curry. So, we searched and foudn a BEAUTIFUL house in Hicksville that went up for rent. MOved in and were happy.. UNTIL THAT landlord decided thigs were working out with new wife in new house so he wanted to sell his house.. again.. displaced.
At this time an acquaintance had a house in Levittown that was a fixer upper he wanted to unload and quickly flip. The price seemed GREAT at the time.. and so we jumped on it. We purchased it with about 10% down BUT the house needed EVERYTHING. Our plan was simple.. live in it AND fix it ourselves. Eventually, in a few years we'd have added value with improvements, time on market, pay down of principal so that we would be able to sell and move to our next home (most likely NOT on Long Island). My husband and I are BOTH self employed. My score was okay.. not great and we had to go stated. We had been doing well in our business for about 2 years and had some money banked (which we planned ot use for improvements). We also wanted to have children and were tired of moving from rental to rental... SO.. we went for it. We got an ARM mortgage ..NOT a subprime becasue it wasn't a low teaser. We started the fix up.
We only had a little bit more improvement to make..but was needed.. SO.. we decided to refinance about 6 months later. Score was slightly better. Home was now appraised at $450 . We weren't taking out much so we took out a $400K mortgage. Again.. couldn't qualify for a FIXED jsut yet.. but again.. with getting my score yet higher AND paying principal, adn time appreciation in two years we'd refinance into a FIXED. We were told that wouldn't be a problem. After all our credit wasn't Bad.. we were Alt-A loan.
Finished the improvements.. AND THERE WERE ALOT .. put so much money into our "home". IN the meantime I did get pregnant and gave birth to our first son in first half of 06. Needless to say my contribution to the business and my side work that was bringing in income stopped.. not to mention my husband pre-occuppied with the house repairs so he didnt' contribute as much.. adn our income decreased ALOT.. but no worries right..we'll just pick it right up and be fine. We were making our mortgage payment of $3200/month (with taxes and homeowners included). IT was VERY tight, but we were managing. In addition my score was climbing... the plan was on the way..
ACCEPT... the market was crumbling.. so come August the equity we thought we had in our home WASN'T there! Nothing was moving.. so our LTV was too high. Score was okay..but the industry froze up and started requiring even HIGHER scores for a self employed person going stated income !! I WAS LOCKED OUT OF A REFI POSSIBILITY DESPITE THE FACT THAT FOR THE PAST 2 1/2 YEARS I WAS PAYING OVER $3000 A MONTH IN MORTGAGE ON TIME!!!
Now I knew what was coming.. there is NO WAY we could afford the jump from a 6.95% to a 9.95% in the first adjustment coming in December to reflect on Jan 08's payment. I immediately picked up the phone and started the phone calls.. TO NO AVAIL!!!
After all the news stories about all the "help" program lenders were offering.. mine conveniently "wasn't participating" despte the fact that Wells Fargo (whom I found out through Midland Mortgage was the noteholders) was supposed to be one of those participating. Their answer "the group of investors that holds your mortgage WITHIN Wells Fargo is NOT participating". I thought.. how convenient!! My theory.. those "programs" are good PR spins by the bank to make the public THINK they are doing something BUT they are taking homes AND taking gov't money at the same time!!
We did fall behind in December.. busienss slowed down.. Right now though, with the adjustment.. we are now 90 days behind. Here's the thing.. I'm worried about throwing even MORE money on making my payments to this company when it's inevitable that unless they re-negotiate my mortgage terms.. ie: fix the interest rate etc. There is NO WAY I can hold on to this house. To be honest with you.. a Levitt house is just not worth where the payments would go to when the next adjustment kicks in in June..
i want to say I'll give it a month or two more.. in the hopes that hte bank does come around and do something .. anything.. that will allow me to keep paying my mortgage AND keep me in my home..
FHA secure is out.. score is NOT high enough now with 90 days late (cause my score is horrible now as a result) AND Last years 2006 return was pathetic .. that I just don't qualify.
I'm dont' want to let go.. I put so much money into this house.. so much. I didn't go crazy with granite counters nad stuff.... but it's the time and the care and yes, the money we put into it.. it's sickening.
We were trying to do the right thing. HOw could we see this coming.. we were always told real estate was a good and safe investment.. adn here we are.. about to loose it all!!
When do I say enough is enough!! When do I throw in the towel and just live here for free until the bank takes it away (and I'm taking everything I put into it OUT before the bank does that.. I didn't do all this work for someone else.. to enjoy.. to hell with them). I've tried SO HARD to make EVERY effort to work something out with NOTHING>. NO HELP or NO GIVE whatsoever. Here we are willing and really able to live up to our mortgage obligation in the sense that we WANT to pay it back .. we WANT to be homeowners paying a NORMAL interest rate AND taxes.. yet we are being FORCED OUT. I mean we were paying $3000/ month to live in a LEVITT house.. all in all we've proven to be good responsible homeowners / borrowers. We weren't paying some ridiculously low and unrealistic interest rate for crying out loud!!
Just don't know what to do at this point. Do I just give it up!!
The situation you've found yourself in is truly unfortunate and my heart goes out to you. One avenue out of this situation would be to consider a "short sale". Find a Realtor who has experience with "short sales" to list your home and work with your bank. In a short sale, you sell the house for less than you owe and the lender agrees to take a loss. Taking a loss is often cheaper than foreclosing and for you it will be better for your credit. Don't be destructive and take out the improvement you've made. Try to make the home as appealing as possible so you can find a buyer for it.
Whatever decision you end up making, keep in mind that it's only a house. You have a beautiful son and a hard working husband and (hopefully) your health. It's not the end of the world. I hope things will work out for the best for you and your family.
Went and fille dout the informatin. I thin I did this with them before back before the holidays and I think it didn't get very far. Let's see what happens this time. I'm also contacting Hope Now.. we'll have to see.
TM - I agree with the advice on the short sale. You'll lose your downpayment and what you have sunk in in improvements, but you have worked thus far in improving that credit and you will want to buy the next house for that son of yours. I'm sorry for your plight (I nearly fainted with the mortgage amount!) and hope that you can indeed find a way out.
TM - I agree with the advice on the short sale. You'll lose your downpayment and what you have sunk in in improvements, but you have worked thus far in improving that credit and you will want to buy the next house for that son of yours. I'm sorry for your plight (I nearly fainted with the mortgage amount!) and hope that you can indeed find a way out.
Yeah.. it's one of our possibilities. My husband is not ready yet to throw in the towel.. male pride I guess. at some poitn I will not even attempt to make payments ..try to short sale and hope that the mortgage company comes around and fixes the terms of the mortgage.. Cause I really don't want to start over.
My credit score I've worked to rebuild is already destroyed... as we are now behind on the payments.. I've filled out information on antoher website that someone posted above and hope that helps along with possibly getting Hope Now on my side. We'll see...
I'm not sure if this will work because it will depend on rental rates, but have you looked into renting your house? For example: If you can rent your home for $3,000 - $3500 per month, you would be close to breaking even on your mortgage. Then, you and your family could move into a small house or apt (with a low rental rate), which hopefully could be covered by your husband's income. Do this for a year or two which will help your credit score and then refinance the mortgage into a fixed rate and move back into your home.
If the rental rates are less, it could still work depending on how much income your husband is making. Is this is an option, I'd also talk with the bank to let them know that you're working towards preventing foreclosure with this option and ask for some more. The worse thing they can say is "no". Good luck.
We were trying to do the right thing. HOw could we see this coming.. we were always told real estate was a good and safe investment.. adn here we are.. about to loose it all!!
When do I say enough is enough!! When do I throw in the towel and just live here for free until the bank takes it away (and I'm taking everything I put into it OUT before the bank does that.. I didn't do all this work for someone else.. to enjoy.. to hell with them). I've tried SO HARD to make EVERY effort to work something out with NOTHING>. NO HELP or NO GIVE whatsoever. Here we are willing and really able to live up to our mortgage obligation in the sense that we WANT to pay it back .. we WANT to be homeowners paying a NORMAL interest rate AND taxes.. yet we are being FORCED OUT. I mean we were paying $3000/ month to live in a LEVITT house.. all in all we've proven to be good responsible homeowners / borrowers. We weren't paying some ridiculously low and unrealistic interest rate for crying out loud!!
Just don't know what to do at this point. Do I just give it up!!
I'll keep this businesslike. You're only looking at things from your POV. From the bank's perspective, you are a poor risk. In fact, you're a worse risk now than when they made you a loan in the first place-- and you were on the fence then since you went Alt-A. You have a low credit score, can't qualify for FHA, your income is lower and trending downward, your business is off, the economy is slipping and you're behind on your payments. You're not even making partial payments. You've already lost your equity, so further losses are the bank's alone. The probably of default is high. If you don't default now, you're probably going to default down the road. You're a sunk cost, and while the bank doesn't want your house, they certainly don't want to get deeper in the hole with you. They are between a rock and a hard place-- just like you are, and they are trying to minimize their losses since they are pubicly traded companies. They have stockholders, who are saying loud and clear, "Stop losing money NOW." Borrowers like you have already caused their stock to drop, and they are feeling the pain-- just like you.
If your bank is Wells Fargo, or if you are in a portfolio pool, they absolutely don't want to give you any more concessions. Your LTV and ratios don't meet their guidelines, and you are like concrete in their loan portfolio. Once you stop paying, they fear that you're going to do exactly what you have stated you're going to do-- drop any pretense of payment and take a free ride for as long as you can, then walk. You're going to take it one step further-- you're going to strip the house and make it more difficult for them to sell.
I'm very sorry for your situation. You made a lot of unfortunate choices, and the market didn't go your way. I'm sure you'll rebound and go on to better things. But there are two sides to every story, and it's really not all the bank's fault, you know? If you want to make it a business decision, then why shouldn't they? You have both lost in this transaction, and stockholders have lost as well. Cutting loses is one thing, and many are choosing to call that a business decision. But continuing to live in the house for free for as long as the bank will let you, then spitefully stripping it before you go so you can take them for all you can-- that crosses the line into a character issue, don't you think?
I'll keep this businesslike. You're only looking at things from your POV. From the bank's perspective, you are a poor risk. In fact, you're a worse risk now than when they made you a loan in the first place-- and you were on the fence then since you went Alt-A. You have a low credit score, can't qualify for FHA, your income is lower and trending downward, your business is off, the economy is slipping and you're behind on your payments. You're not even making partial payments. You've already lost your equity, so further losses are the bank's alone. The probably of default is high. If you don't default now, you're probably going to default down the road. You're a sunk cost, and while the bank doesn't want your house, they certainly don't want to get deeper in the hole with you. They are between a rock and a hard place-- just like you are, and they are trying to minimize their losses since they are pubicly traded companies. They have stockholders, who are saying loud and clear, "Stop losing money NOW." Borrowers like you have already caused their stock to drop, and they are feeling the pain-- just like you.
If your bank is Wells Fargo, or if you are in a portfolio pool, they absolutely don't want to give you any more concessions. Your LTV and ratios don't meet their guidelines, and you are like concrete in their loan portfolio. Once you stop paying, they fear that you're going to do exactly what you have stated you're going to do-- drop any pretense of payment and take a free ride for as long as you can, then walk. You're going to take it one step further-- you're going to strip the house and make it more difficult for them to sell.
I'm very sorry for your situation. You made a lot of unfortunate choices, and the market didn't go your way. I'm sure you'll rebound and go on to better things. But there are two sides to every story, and it's really not all the bank's fault, you know? If you want to make it a business decision, then why shouldn't they? You have both lost in this transaction, and stockholders have lost as well. Cutting loses is one thing, and many are choosing to call that a business decision. But continuing to live in the house for free for as long as the bank will let you, then spitefully stripping it before you go so you can take them for all you can-- that crosses the line into a character issue, don't you think?
I 100% do not believe it's a character thing.
I believed inthe Real Estate Market. I believed in the "you can refinance" line I was given.. like it would be no problem. I really BELIEVED it.
And.. I was on course FOR JUST THAT!! I did EVERYTHING I was supposed to do to make it happen. The stuff that was out of my control was what did me in.
Yes.. my business trended downward at the END Of the year , however has since picked up and is on it's way back up.. BUT NOT at the pace that my mortgage can tick up. I don't feel I'm a risk at all.. Actually quite the opposite.
Why? It would be much easier for me to just GIVE IN and let it go.. to walk away.. however I continue to be persistent and FIGHT THEM to get them to work with me so that I CAN STAY! THIS in a climate where many CAN pay but are walking away simply because their mortgages are upside down.
It may be busienss to the bank.. but it's personal to me. They've lied, cheated and are cheating the public and the government by saying they are working with borrowers when it's all a PR lie.. and then getting HUGE handouts of taxpaying money, which I am ALSO a taxpayer, to BAIL THEM OUT while leaving the regular average Joe a empty shell.. depressed, financially destoryed.. and yes.. homeless!!
YOU BET I will strip this house. I will take the money I put in adn get it back ANY WAY I CAN.. because that's the game the banks are giong to play. They dont' care that I'm financially destroyed by their lack of working with me.. You think with a 2 year old a small dog and a credit score in the toilet I'm going to be able to find a rental.. AND on an island where rentals are NOT readily available? Nope.. I'm in for it.
so I will have no guilt removing the new stove I put in, the new bathroom sink I'll sell them on ebay and take the money and pay the lawyer I'll need to pay to get out of this mess with as little impact on me as possible. I'll take my little cement angel that guards my small garden and the bushes I put in.. because I didn't put it there for greedy bastards to get a hand of. See.. for ME and for many homeowners.. this isn't about busienss.. THIS IS OUR HOME!! This is MY life savings I put into BUILDING a home.. a foundation for me and my family.. THE BANKS will be okay either way.. because THEY are getting help from ALL ANGLES.. while the working middle class is taking it up the hoo hoo! So no..I don't feel bad.. because as far as I'm concerned everything I put into this house is mine , not theirs.. and I will be taking it with me!! They got enough "free handouts" from the government. Oh.. and the CEO's of the banks are still getting their million dollar salaries and bonuses to boot!
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