Owe More than My House is Worth & Need Mortgage Help

Is there any type of loan program available to refinance an upside down home loan mortgage?

Is there any type of loan program available to refinance an upside down home loan mortgage? I owe more than my house is worth and need mortgage help!

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Bill's Answer
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Millions of Americans owe more on their home than it is worth. You are certainly not alone in this situation.

Due to the downturn in the mortgage industry, many people are find themselves in the same situation. The most vulnerable people are those who bought their homes at the peak of the market, in 2005-2007. Whether they want to sell their home or wish to refinance and take advantage of today’s low rates, they are finding few available options.

Trouble Refinancing

Since your mortgage balance is more than the value of your home, you may have trouble obtaining a refinance loan. Most lenders are not willing to extend loans that exceed 100% of the value of the property. There are a few programs worth looking into that are specially aimed at the underwater homeowner that are worth applying for. (Editor’s Note: President Obama announced changes to the HARP (Home Affordable Refinance Program) that will help millions of underwater homeowners refinance at today’s low rates. The program will go into effect in late 2011.)

Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the Bills.com Mortgage Refinance Quote page to find a loan that meets your needs.

An experienced mortgage professional can tell you whether you qualify for a loan. Also, if you do not qualify, he can explain you why and give you specific suggestions about steps to take to improve your chances of qualifying for a loan.

Six Options if Standard Refi Is Unattainable

If you do not qualify for a loan, then you should consider six options:

  1. Visit the Home Affordable Refinance Program Web site to see if you qualify for this program. In general, mortgage providers have been slow to embrace this program. However, homeowners who have convinced their mortgage companies to renegotiate the terms of their mortgages are seeing lower payments.
  2. Investigate the FHA Short Refinance program, which is designed to help homeowners with negative equity in their homes to refinance to a lower interest rate and reduced balance.
  3. Try and sell your house at the best possible price. Visit your nearest Assist-2-Sell Realtor and get your house on the market immediately. Sell it for what is left on your mortgage. You'll make no money, but you will be out from under the huge debt. By using an Assist-2-Sell Realtor, you do a lot of the work yourself that is involved in selling your home. They simply assist you and guide you through the maze. Find a place to rent for at least a year (maybe two) until you can get on your feet again.
  4. Contact your lender and discuss a short sale or deed in lieu of foreclosure. In a short sale, a lender accepts a lower amount than the balance of the loan and forgives the deficiency balance. A short sale or deed in lieu of foreclosure must be approved by the lender.
  5. Rent a room. Consider renting a bedroom (and preferably a bath) of your house to a paying roommate. A lot of students and young professionals who work two jobs or who work and go to school at same time are looking for affordable housing. It could be a win-win situation for both parties. You get extra rental income, you have someone else pitch in for bills, and you can deduct all of your rental expenses from your taxes. Check Rent.com.
  6. Bankruptcy is the final option to consider if all others fail. See the Bills.com article Types of Bankruptcy to learn more about your options.

Try to avoid foreclosure. However, if you are a California resident facing foreclosure, you need to understand the state’s recourse and non-recourse rules so you know what to expect. Other states are non-recourse as well, but none use rules as intricate and complicated as California’s.

If you would like to read more about mortgage refinance loans, I encourage you to visit the Bills.com Home Refinance Resources page. If you enter your contact information in the Bills.com Savings Center at the right of the page, we can have several pre-screened mortgage brokers contact you to discuss the loan options available to you.

You should also visit the Bills.com Credit Solutions page to learn more about credit, credit reporting, and ways to improve your credit score, which should help you qualify for better loan terms.

I wish you the best of luck in finding a lender willing to work with you.

I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

Bills.com

96 Comments

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  • 35x35
    Jul, 2012
    Bill
    I do not have a Freddie Mac or Fannie Mae loan, I believe it is Residential Funding corp. I have good credit, 705. I pay my payments on time. I owe about $230,000 , but my house is worth 210,000 - 220,000. I have checked with about 4 or 5 different people now and they want me to come up with $20,000. OK, if I had $20,000 laying around, I probably would not need to refinance. Any suggestions?
    0 Votes

    • 35x35
      Jul, 2012
      Bill
      Residential Funding Co. and GMAC Mortgage are parts of Residential Capital, or ResCap. Ally Financial, which changed its name from GMAC Financial Services in 2009, owns ResCap and and GMAC Mortgage. Ally filed chapter 11 bankruptcy for its ResCap business unit in May 2012. As of this writing, US taxpayers own about 75% of Ally Financial due to bailouts that occurred during the mortgage meltdown. ResCap owns approximately 2.4 million consumer mortgages.

      GMAC Mortgage services mortgages, but does not own the security. GMAC Mortgage may be your servicer, but Fannie Mae or Freddie Mac may own your loan's security. Double-check your assumption about ResCap owning your loan's security by checking the Fannie Mae and Freddie Mac Web sites to see if either own your loan. If either do, look into a HARP 2.0 refinance.

      If you do not qualify for HARP, then you have two options. One you already mentioned. Your second is to lobby your congressional representatives to pass the so-called HARP 3 law that would allow refinances for people in upside-down homes who have loans owned by someone other than Fannie or Freddie.
      0 Votes

  • 35x35
    Jun, 2012
    dbery
    I lived in my home for the past 6 yrs. My mortgage was $140,000 and I now owe $129,000. I wanted to move for the past 3 yrs as the neighborhood is declining. I recently decided to contact my real-estate agent in reference to selling my house. He ran the comps in the area and advised that the average selling price is $101,000. So even though my I made several updates to my home, he advised that there was no way the would sell for what I wanted to place it on the market for. He advised that I would not even be able to break even. I would definitely owe a balance at settlement. I definitely want to sell this home b4 buying another and short sale is not an option as this would prevent me from getting approved for a mortgage. Please let me know what you think about his suggestion. He advised that we place the house on the market for $129,900 which would leave me owing a balance at settlement of about $20-30,000. He advised that I get a personal loan from the bank to pay this possible balance, and once I get into my new mortgage, he would work something out with the bank where I would only pay back a small portion of the personal loan. I would basically purposely default on the personal loan. What do you think about this? This agent is also a lawyer. I live in Philadelphia pa
    0 Votes

    • 35x35
      Jun, 2012
      Bill
      Your house declined in value so much that it is worth less than the balance of your home loan. The decline was not your fault, is widespread, and there are many homeowners in other areas of the US who are in worse shape and would love to trade places with you. There is no elegant solution to your predicament. All of these options will harm your credit score:
      • Short sale
      • Deed in lieu of foreclosure
      • Strategic default (A fancy way of saying "allow a foreclosure")
      • Sell holding a personal loan for the balance, then defaulting

      The last idea, getting a personal loan to cover the deficiency, is the most creative. But this loan still gets you to the same place — explaining to the loan officer why your DTI is so high, or explaining why you defaulted on that loan.

      I commend your real estate agent's creativity. I just do not see how you can qualify for a loan immediately given the after-effects of a loan default. With any option you choose, I just do not see a way for you to emerge from a sale of this home with your credit score intact.

      0 Votes

  • 35x35
    May, 2012
    Jennifer
    My husband and I owe more than our house is worth. We are wanting to move out of state for multiple reasons. One is because the neighborhood is not safe. There have been shotings and stabbings down the street and I am often home alone with the kids. Also, we need to move for a better job and family support. Is there anything we can do that won't hurt our credit?
    0 Votes

    • 35x35
      May, 2012
      Bill
      I assume the market value of your property is less than the balance of the loan. If so, I see three options for you:
      • Discuss a a deed-in-lieu-of-foreclosure or a short sale with your home loan servicer. Both take you to the same place — selling your property — but via different routes.
      • If discussions with your servicer go nowhere, consider a strategic default. This is you only option to rid yourself of the property if your servicer will not consider a short sale or deed in lieu of foreclosure. Before you allow a strategic default, consult with a lawyer in your state who has experience litigating mortgage issues so that you have an understanding of your rights and liabilities for the deficiency balance.
      • Rent the property, and cross your fingers the rental market in your area is tight enough for you to break-even or better on your monthly cash flow.

      Finally, study your state's anti-deficiency rules to understand what, if any, liability you may have for a deficiency balance on your home loan.

      0 Votes

  • 35x35
    Apr, 2012
    Tito
    Question we have one single family home and, two income properties...all three are underwater but current on mortgage payments. We don't qualify for modifications o refi's but we have a huge surplus after making all mortgage payments and bills. Question...we would like to take advantage of the low market values and purchase another home or income property cause our family is growing....Does that make sense????? Help!!!
    0 Votes

    • 35x35
      Apr, 2012
      Bill
      The answer depends on the details of your financial situation. If the income properties have been cash-flow positive for 2 or more years, and you have a high credit score and low DTI, you may qualify for a home loan.
      0 Votes

  • 35x35
    Apr, 2012
    Bryan
    My wife and I (actually soon to be ex-wife) bought a waterfront home here in Ft. Myers, Fl back in 2008. We paid $165,300 and have an FHA fixed mortgage with Citi Mortgage at 5.875%. We currently owe $154,000 on the house and the market values are still not up to what we owe. The house still needs alot of work, however I have done alot of work to it myself (put in a new kitchen, updated plumbing, etc). The problem is my wife is wanting a divorce and we have to figure out something with the house. She wants to move away from Ft. Myers and I plan on staying. I would consider keeping the house if the bank would work with us (I cant afford the mortgage on my own), however to refinance or put the house in my name my income is only $42,000 a year. I dont know what would be the best option for now and am needing help. So far the mortgage company doesnt seem to want to help or have suggestions especially since we have not missed any payments and are not in a "financial hardship". Please help. Thank you, Bryan Ott
    0 Votes

    • 35x35
      Apr, 2012
      Bill
      Difficult to offer a specific suggestion without knowing the market value of your property, your credit score, and DTI ratio. Review these two Bills.com articles to help you become acquainted with these options:

      See also the Bills.com resource Florida Mortgage Foreclosure & Short Sale to learn more about your options.

      0 Votes

    • 35x35
      Apr, 2012
      Bryan
      To answer your questions....we dont have much debt to income ratio other than our mortgage. Both of our scores are in the mid to high 700's (last year my score was a 730). As far as market value the property appraiser shows it worth $78k however websites like zillow.com and trulia.com show the market value being $139K, there are houses in the neighborhood selling over $150K but they have pools and also are complete turn key (completely remodeled need nothing).
      0 Votes

  • 35x35
    Mar, 2012
    sandi
    We bought a house in 2005 for $200,000 and owe 190,000 on it now, but the appraisal value is only 140,000. We are not backed by fanny or freddy so no one will refinance us. We currently have a 7.9% loan. I am not on the house loan, just my husband. We have consulted with Quicken Loans and they can't help us. I filed bankruptcy about 7 years ago. Who do I go to for advice - a lawyer?
    0 Votes

    • 35x35
      Mar, 2012
      Bill
      What are your goals? If you wish to quit the house, then by all means consult with a lawyer in your state to learn how your state's foreclosure and anti-deficiency rules impact you. If you wish to refinance, then focus on improving whatever defect Quicken mentioned in your refinance application. If it was your spouse's credit score, improve it! If you do not have enough case reserves, then save more! If your LTV was too high, then cross your fingers the property values improve in your area.
      0 Votes

  • 35x35
    Feb, 2012
    b
    We are in a loan modification program since end of 2010. Part of agreement; we receive $80.00 credit each month as long as we are current and never late which will be applied to principal once the loan mod term is over, records are never consistent; I want justice and accountability, * we have never been late, current on mortgage, however; we are upside down. How do we proceed with the following:
    • Request an audit (free)
    • File a complaint in which we get a response in 30 days
    • Request mortgage reduction to meet market

    Any other suggestions?

    0 Votes

    • 35x35
      Feb, 2012
      Bill
      Consult with a lawyer who has experience negotiating with mortgage servicers. He or she will help you achieve your goals in resolving your home loan.
      0 Votes

  • 35x35
    Jan, 2012
    Hannah
    In 2006 my house in Detroit was worth $90k and I took out a home equity loan for $40K for my kid's college expenses. Now the neighborhood is destroyed by foreclosures and vacancies and if I could sell the house at all it might fetch $10-15k - that is what the few recent sales are going for, but really, houses are not selling at all. The one across the street has a sign on it for $2,900, cash, no takers. I moved to an inherited house to get out of the neighborhood for safety, and have no loans on that house. But I am paying taxes, utilities and insurance on two houses which I can't afford, although all my payments are current. The loan payment is small right now, but paying all those expenses on a house I don't live it will cost me $7000 this year. I want to get out from under the house but due to credit card and educational debt I doubt I could finance the balance I would still owe. The market is not going to recover for decades, if at all, in that neighborhood. Since I already have another place free and clear, I'm not worrying as much about the hit on my credit score. Renting the house out is not really an option as there are plenty of empty, open, free houses all around me. Even after reading a lot of the questions here I really am unclear on my options. So what do you do when your house is really worth nothing? Do I try to talk to the lender or avoid scaring them (or is that conversation really just scarier to me than to them)? Do they do deals with home equity loans (versus mortgages?) Do I walk away, and if so what are the consequences? I make $65K per year - is this too much to qualify for programs if there are any out there (we are current on payments but struggling with high balances)? Should I just declare bankruptcy, or is that silly when I can make my bills now, even if I am only making minimum payments and barely that? Any help to get me out of a mess I created in my naivete is welcome!
    0 Votes

    • 35x35
      Jan, 2012
      Bill
      I would not call you naive. In fact, you are wise to plan a graceful exit strategy now.

      Consult with a Michigan lawyer now who has experience in bankruptcy to learn your options.
      1 Votes

  • 35x35
    Nov, 2011
    Priscilla
    We purchase our house at the very end of 2006 so obviously we owe more than the house is worth. I was able to refinance our first but my biggest problem is my 2nd. It's at over 8% interest. Is there anything we can do to get that lower. I've tried calling the lender and they say they can't do anything. Do you have any ideas of what we can do? Thanks!
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      A common question among Bills.com readers. I do not have any good ideas, which is to say I do not have any no-risk or no-pain ideas for dealing with the situation you described. Mortgage servicers, as a group, will not negotiate with a homeowner unless they think it is to their advantage. You have four bad options and no good options:
      1. Keep trying to negotiate. Who knows, maybe the servicer might say yes if you ask nicely enough. This probably will not happen.
      2. Default. By making your payments consistently, you give the lender zero incentive to negotiate. Paint the mortgage servicer and the loan investor into a corner and force them to come to you to negotiate a settlement. This is a risky tactic, and should be done only after you consult with a lawyer to understand the consequences of a possible foreclosure.
      3. File bankruptcy. A chapter 13 will strip the lien on the second (junior) loan. Again there are risks and costs to bankruptcy you must discuss with a bankruptcy lawyer before pursuing this option.
      4. Do nothing. Continuing to pay the loan maintains your credit score and completes your promise to repay the loan.

      Consult with a lawyer before taking any drastic action, such as stopping payment on your second.

      0 Votes

  • 35x35
    Nov, 2011
    pj
    We currently owe about 30,000 more for our house than it is worth. Our mortgage is through a major chain but not a Fannie Mae or Freddie Mac loan. We have an interest rate of 7.1 and would just like to lower our interest rate and as we are. We are not late and have remained current on our loan for years. Do we have any options for refinancing what we owe at a lower interest rate?
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      Aside from working out something with your lender, you currently do not have a lot of options. Have you spoke to your lender about refinancing or modifying your loan?
      0 Votes

  • 35x35
    Nov, 2011
    Pamela
    I filed bankruptcy in July 2010. Intended to reaffirm the mortgage, but it never happened (long story). I've been living in my house since then, making on-time payments up until last month. My intentions were to keep the house, I've spoken with my lender, Wells Fargo, and I keep getting the runaround about a possible loan modification (get it reaffirmed, then we'll talk... leave me your number I'll get back to you... have your bankruptcy lawyer contact me...) So I'm convinced they won't work with me until I'm severely delinquent, or maybe even not at all. If I try after a few months of being delinquent to work something out with the bank, will it then finally work with me (considering the loan was included in the bankruptcy)? Logically, I should just sit in the house and save what I would be spending on mortgage payments, and wait until I get kicked out. How long, from start to finish, might I have? I should also mention that without an actual appraisal, but based on the prices that homes in the neighborhood have sold for, and the condition of my home (cracked foundation), I am quite confident that I owe more on the house than what it may sell for. I am also wondering what the credit repercussions will be after the house is foreclosed upon. Since it was already included in the bankruptcy, will it affect my score if it goes into foreclosure so long after my discharge? I assume the foreclosure will show on my credit report being as it will be a judgement. I know a bankruptcy and foreclosure are equally bad, but since my bankruptcy I've been able to view my transunion FICO score, and in one month it raised 30 points because I paid off a student loan. Will the score then lower with the foreclosure? Or will it be unaffected because it's already been "taken care of" in the bankruptcy? If my on-time payments weren't going toward my good credit, thereby meaning that delinquent payments are not going toward any bad credit, how might a foreclosure eventually affect things?
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      My first thought is not responsive to your question, but I must caution you to think twice before reaffirming your mortgage. In almost all cases, a home loan reaffirmation is not in the best interest of the debtor, and lawyers who thoughtlessly sign their clients' reaffirmations are not serving them well.

      Your questions center around the impact bankruptcy and foreclosure have on a debtor's credit score. See the Bills.com resource Short Sale, Foreclosure & Your Credit Score for Fair Isaac & Co.'s answer to your question. Two important caveats: First, not every credit score is a FICO score — you may see your FICO go up, your PLUS Score may go down, and your VantageScore stay the same. Second, three credit reporting agencies report gather and report information about consumers. It is rare for all three CRAs to gather and report identical information about a consumer. A consumer's FICO score may vary at Equifax, Experian, and TransUnion.
      1 Votes

  • 35x35
    Oct, 2011
    Kevin schulz
    Sometimes it happens that we have taken loan for a new home but it happens that when the time comes to repay the loan and you are not in a condition to repay the mortgage than there are some banks which helps us by seeing the present condition of us and manage to keep home with us by extending the time. But the best idea is to have a contact with finance providers they will help you all over in finalizing the mortgage.
    0 Votes

  • 35x35
    Oct, 2011
    Tim
    It is the bank industry's fault that property values are so low since they pushed foreclosures rather than working with people who want to stay in their home, as a result, my property value went down and is underwater due to all the foreclosures. My solution was to strategically default and file BK so the bank can't get a deficiency judgment (which are allowed in Illinois). And don't give me that absolute nonsense buying a car and buying a house comparison that so many realtors make - nonsense, when you buy a house, you expect it to go up in value or at least retain its value, when you buy a car, you expect it to go down in value. Oh, and the foreclosure process takes forever in Illinois, so living rent free for a while. The banks need to modify the principal balances on ALL mortgages to reflect the current market value. It is not fair just to do it for people who allegedly do not make enough because as their property values go down, so does the value of the property of those of us who were current. This whole mess is the bank and real estate industry's fault - don't buy their absolute nonsense trying to pawn it off as everybody's fault - b.s. - it is their fault. They were the experts, not the home buyers, and they screwed us - time to screw them back until they wake up.
    7 Votes

  • 35x35
    Oct, 2011
    Dave
    I purchased my home in 2005 for $342K putting down $92K which is with Citi Mortgage and it is interest only at 5 and 3/8. Later I took a $50K HELOC from BOA. I just tried to refi and got my appraisal at 283K, so now I'm upside down. I want to refi to a lower rate. What is my best option to refi to a lower rate with or without the HELOC? What can I do?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      You have few options if you have greater than a 125% LTV. See the Bills.com resource FHA Short Refinance to learn one option.
      0 Votes

  • 35x35
    Oct, 2011
    Brian
    We got our house 10 years ago for 715k we put 260k down and have since then paid a total including down of 580k into this place and it's is now worth about 400k. Is there anyway to sue for title when you have already well paid for the property's current value? This was a countywide loan in california, and has been modified twice to a new principal balance of 550k and fixed interest/terms. But seems there has to be something out there for thoose that have truly paid the money into the propety already well beyong it's real value due in part to the Countrywide adjustable problem to begin with.
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      You raise an interesting argument. Unfortunately, I do not foresee a court agreeing with you, or more to the point, I do not know of any courts that issued decisions based on a theory like yours.

      In a nutshell, your theory transfers the risk of buying a home to the lender — if the price drops it bears the burden. Under this theory, would the converse be true, too? By that I mean, if the property increases in value would the lender pocket the equity?

      Note I am not addressing any claim you may have against Countrywide/Bank of America for breach of contract, fraud, or violation of California's lending laws. Consult with a California lawyer who has experience in quiet title actions to learn if you have any cause of action against Bank of America.
      0 Votes

  • 35x35
    Oct, 2011
    Liz
    As a result of the mediation with my bank (CitiMortgage), I am listing my foreclosed home for short sale (for 90 days) in the hopes of eventually pushing for a "deed in lieu of foreclosure" should there be no prospects, however, a licensed Realtor, who happens to be with a local title company, has made me an offer to purchase the home at fair market value and possibly rent it back to me (as one of his options to me) so that I won't have to go through the expense & hassle of moving and will be able to stay in my home for a while longer (time frame is undetermined at this time). I live in Florida...Do you know if this is possible, or should I consult a real estate attorney?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      We have all heard the phrase, "The devil is in the details." That is especially true in any complex real estate deal. By all means, ask a lawyer of your choosing to review the contracts before you sign them.
      0 Votes

  • 35x35
    Oct, 2011
    Steve
    We bought in 09 for 234k, our home is now worth 205k and we have to move away for my job. Our loan is 223k but we've never missed a payment and have excellent credit. Given realtors' exorbitant fees + closing costs and so forth we are likely to be short by 40k, which we do not have. We are at our wits' end as to what to do. What should we be doing? We do not seem to qualify for short sales or deed in lieu, since no hardship as such exists. Thank you.
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      Start by speaking with your lender. If your job is ending, unless you move, and you won't be able to pay the mortgage, your lender may be willing to allow a short sale or deed-in-lieu.

      Can you rent your home and continue to pay your mortgage or make up the difference, due to a cost reduction in the area where you will move? If so, that is worth considering.
      0 Votes

  • 35x35
    Oct, 2011
    Jason
    I bought by house 6 years ago for $156K. In the past few years there have been quite a few foreclosures in my neighborhood. Recently a home 4 lots down from me sold for under $50K. My family has grown and we'd like to move, but it appears we will never get out from under this house. We still owe roughly $140K on the home and it is worth far less. Is our only option to just stay put for 10 years while the market either turns around or we've paid enough into the home to be able to break even?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      There are no perfect, pain-free solutions to the situation you described. Foreclosure and short sale have negative consequences for a homeowner's credit score.

      If the residential real estate prices in your area are rebounding, then you may want to hang on until you can sell the property at break-even. However, if the housing prices are going nowhere but sideways or down, then consider a short sale or allow a foreclosure now.
      0 Votes

  • 35x35
    Sep, 2011
    Richard H
    Homeowners can save their homes from foreclosure (Yes! Avoid foreclosure) and keep their homes with a 10% equity position.
    0 Votes

  • 35x35
    Sep, 2011
    sharon
    My husband purchased a home before we met. We were married and I, alone, purchased the home we live in currently. He is getting foreclosure notices on his home that he has been trying to sell for 2 years and today I received a letter to the "unknown spouse". Am I liable for his mess in the state of Ohio?
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      Have you and your spouse resided in a community property state? If not, and if as you mentioned your spouse's separate property was always mortgaged and titled in your spouse's name alone, then I do not see liability for you. However, if the title is in both names, or if you married or resided in a community property state, then there is a possibility you may have liability for a deficiency balance relating to a foreclosure on your spouse's separate property.

      What was the content of the "unknown spouse" letter?

      Related thought: A collection agent is not your lawyer. A collection agent has one task — collect money. Collection agents have no duty to provide consumers complete or accurate legal information or advice regarding a consumer's liability for a debt.
      0 Votes

  • 35x35
    Sep, 2011
    Juan
    I bought my home 4 years ago for $215.000. I made a down payment of $150.000. Now, the house is worth $80.000. Logically, I paid the house allready. What can I do to lower the payments? Somebody help me! Please.
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      While you have paid more than the home is currently worth, it is not a logical assumption that you paid for the house already. You have to pay off the loan you took, regardless of the current value of your home, in order to fully own it.

      Given the size of your down payment, the current value, and the amoount of principal you should have paid in the past four years, it appears to me that you have enough equity in your property to refinance your home loan to receive a lower rate and lower payment.
      0 Votes

  • 35x35
    Sep, 2011
    weng
    I have a 5 year interest only ARM...I put down almost 40k for my house which is originally worth 430k...Now, I owe the bank 383k but my house is only currently worth 340-350k...I don't know if it's better to short sale it and buy a house again in 2-3 years or keep my house by doing a regular refinance...But refinancing it would cost me around 60k according to the lender...and I tried to apply for the Making Home Affordable Refinance but did not qualify for it...I don't know what to do...I need advice from an expert...
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      I have a couple of thoughts to share:
      1. If you short sale, it may be five years before a lender will work with you again on a mortgage loan.
      2. There is a lot of talk about new government programs to provide relief to borrowers in your situation. It may be best to hold tight, for the moment, to see what develops.
      0 Votes

  • 35x35
    Aug, 2011
    motween33
    I live in Washington state. I owe more on my home than it is worth right now. I bought for $310k and it's worth $214k. Can I rent it out? Are there any laws prohibiting that in my state?
    1 Votes

    • 35x35
      Aug, 2011
      Bill
      Your loan may have a provision that ties your interest rate to the fact that it is your primary residence and that you, the owner, are occupying it. Technically, you may be required to let the lender know if you are no longer living in the home, which could lead to an interest rate adjustment or even, in an extreme case, the lender calling the loan to be paid off.

      Practically, most people in your position would not likely draw any attention to themselves as long as the mortgage payment is paid on time during the period when the home is rented out.

      In terms of breaking the law, I can't give you legal advice. My guess is that you may be violating a term of your mortgage lease, but that there is not a criminal illegality being committed. If you want to get an authoritative legal answer, you must consult with a licensed attorney in WA.
      1 Votes

  • 35x35
    Aug, 2011
    Maureen
    I have an 80/20 loan and I am $65,000 upside down on my townhome. Chase is willing to refinance the fist mortgage but not the second, but it it only lowering my 1st mortgage payment by $25.00 per month. Is a short sale still an option? I am employeed and am making my payments on time, but I have this 80/20 loan and I am in credit card debt. What are my options?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Have you spoken to your second mortgage holder? Is your loan a recourse or non-recourse loan? Do you feel that your home's value will appreciate over the time you expect to remain in the home, so you will no longer be upsidedown?

      A short sale may be an option. Your lenders have to agree, however. If you are not in a financial hardship, they may not do so.

      I suggest speaking with an attorney you select carefully. You can review the questions I listed and also discuss a strategic default, where you walk away from your mortgages, if the lenders offer you no flexibility.

      Regarding your credit card debt, I suggest using the Bills.com Debt Coach tool. It is a free way to find the best way to pay off your credit card debts.
      0 Votes

  • 35x35
    Aug, 2011
    Jason
    Well I am looking for a house cause I'm tired or renting and not being able make changes to the place i rent. anyway I was wondering something I have to types of debts one is student loans and the other some credit and money i own to a college anyway I have 8 thousand in credit debt stuff and the other is student load debt so i was wondering if i could get a home loan for the house and my credit bills not my student loads just the credit cause if i could do that the extra money I'm paying on that could go to the house mortgage and id be able to pay 800 bucks a month for a house. is that possible to do or should i just pay it off. I'm just seeing what i can do cause interest rates are so low id save a bit of money on the house right now.
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      To my knowledge, you won't be able to find a loan that consolidates your current debts with a new home loan.

      You should speak to some lenders and see what you need to do to qualify for the home purchase loan you seek. A loan officer will tell you if your debts need to be paid, in order for your debt-to-income ratio needing to be lowered.

      The simple fact that you have these debts will not disqualify you, but the percentage of your income the debts eat up is the key factor.

      I suggest you contact one of Bills.com's pre-screened lending partners, to see if you currently qualify. Keep in mind that FHA purchase loans only require 3.5% down payment. That may be a good option if you have to pay down debt to lower your DTI. If not, maybe you can get a conventional loan and use any funds you have to make a 20% down payment, depending on what you have available and the cost of the home you seek to buy.
      0 Votes

  • 35x35
    Aug, 2011
    Craig
    Our county recently completed new property value appraisals and our value dropped by $30,000. We have lived on our condo for 4 years and were hoping to try and sell next year. We now owe more on our mortgage than what the auditor has appraised for. How will this affect our efforts in trying to sell our home and is there anything we can do to help our situation before trying to sell. Thanks!
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Tax assessments are a poor guide for property values, in general. That being said, it is not usually the case that an assessor lowers the value of a property without cause, as it is in the county's interest to keep assessments high to keep the revenue flowing in.

      Are there units in your complex that have sold recently? What did they sell for?

      As things currently stand, there are few options for underwater homeowners. If you are not severely underwater, you may need to bring some cash to the closing, if you wish to sell. You may have to speak to your lender about a short sale.

      One way to help yourself is to try and make some improvements to your condo that would increase the value. You just want to make sure that you get back what you put in or it would have been wise to simply sell the condo for less and use the improvement funds to pay the balance between sale price and principal balance.
      0 Votes

  • 35x35
    Aug, 2011
    Michael
    Hello Bill. I bought my home in jan 2007 for 150K and it now worth 27K while I am still owing 140 on it. To top it off, I have being jobless for about 18 months now. I am seriously thinking about walking out of the house and get something cheaper, but am afraid the lenders will still come after me. Bankruptcy seems to be my only option but I don't know how it will affect my wife and kids, what should I do?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      Follow the links in the original answer above to learn more about your options. Your mentioned bankruptcy. That is certainly a possibility if the mortgage servicer sells the deficiency balance collection account to a collection agent. Consult with a bankruptcy lawyer to learn more about this option.
      0 Votes

    • 35x35
      Sep, 2011
      Stephanie
      DON'T WALK AWAY and allow the bank to take your home. Talk to your lender about a shortsale packet, NOW. There are people willing and able to buy your home TODAY, but the lender has to agree to sell it for less than it is worth. Your credit will SUFFER badly if you go into bankrupcy, or foreclosure. A shortsale could allow you to buy again in about 2 years. Stephanie
      0 Votes

  • 35x35
    Aug, 2011
    diana
    My fiance purchased our home in 2007. He has since accumulated quite a bit of credit card debt. we found a company and are making a monthly one-lump-sum payment to pay it all off. this is in addition to another loan and many other bills including child support. the mortgage payment is the one bill that is always payed on time every month. we are struggling more and more to get everything paid and are really looking to move and start over. our house is worth less than what he owes and so i think a short sale is just about our only option. we recently lost our home insurance do to our irresponsibilty in not signing and returning the new forms. now we are unable to find anyone who with insure our house because of what it's worth and his bad credit. do you think being approved for a short sale is a possibility even if our mortgage payment is never late?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      There are no universal rules mortgage servicers follow for short sales, so the best party to answer your question is your particular mortgage servicer. Call them and ask what criteria they use for determining short sale eligibility.
      0 Votes

  • 35x35
    Jul, 2011
    Megam
    I am in a desperate situation. I am 62 y.o. and single. I want to retire next year. I bought house in 2005 for $320K and renovated it with $85K. I had it appraised for refi and it came in at $285K. I owe $271K ($256K on fixed interest only that adjusts to full in 3.5 yrs.) and 2nd mortgage of $20K which is paid off in 5 yrs. I had the house on the market in Eureka from March to June and no bites at asking price of $310,000. I have a chance to refi at 3.475% 5/1 ARM or 4.875% fixed. But, it is nagging me to just walk away and be free from asset. Should I wait until retirement to try for ANOTHER loan mod from ASC or and move out of state and start over. My income will drop from $72K/yr to $30K/yr retirement income. I don't necessarily want to become a landlord although the rental income could be about $1800/month. What is your advice? Thank you your for your assistance.
    0 Votes

    • 35x35
      Jul, 2011
      Bill
      Unfortunately, your 2005 purchase was near the peak in housing prices, so it is not surprising that the present market is less than the purchase price. If I understand you correctly, you own a residence with an appraised market value of $285,000 and have a first loan with either a $271,000 or $256,000 balance, and a second with perhaps a $20,000 loan. Therefore, you owe either $276,000 or $291,000 on the property currently. You would like to retire in a year whereby your income will drop from $72,000 to $30,000.

      You have several options, none easy or fast.
      1. Look into an FHA Short Refinance. This is perhaps your best option if your property value is less than the balance of the first mortgage / deed-of-trust.
      2. Short sale. This is less appealing than a short refinance, but if you do not qualify for a short refinance, it may be a more graceful exit than a foreclosure.
      3. Foreclosure may be viable if you reside in a no-recourse state. I surmise you reside in California. If you never refinanced the first loan, and allow a foreclosure, you are protected by California's anti-deficiency rule. If the second was a purchase-money loan, then this is also covered by California's anti-deficiency rule.
      4. Bankruptcy will remove your personal liability for any deficiency if you allow a foreclosure and are not protected by an anti-deficiency rule

      Consult with a lawyer in your state who has real property or bankruptcy experience to learn more about your options.

      0 Votes

    • 35x35
      Jul, 2011
      Megan
      Thank you for your reply. I actually have a $256K first purchase money, and a equity line of $20K (not first purchase money) in CALIF. My note is held by CreditSuisse and FreddieMac. I tried the HAMP and no luck. I just tried the HARP and the 2nd lienholder would not subordinate because of loan to value. My credit is excellent and house is in excellent condition. But what am I holding onto here?
      0 Votes

    • 35x35
      Aug, 2011
      Bill
      I surmise you are wondering if it would be wiser for you to allow a foreclosure now or wait until your income drops when you retire. California is a large state, and some areas in the central valley have seen tremendous drops in housing prices that will take years for recovery. Other areas have seen prices drop, but then recover. Talk to several real estate agents you trust that are familiar with your neighborhood. Ask them for their guess as to the value of your property in a year. If you reside in an area where the price trends are looking up, then standing pat for now might be a wise course of action. However, if you reside in an area with many pending short sales or looming foreclosures, then bailing out now might be smarter.

      Consult with a lawyer before allowing a foreclosure so that you understand your liability for both loans.
      0 Votes

  • 35x35
    Jul, 2011
    Sam
    What if my house sells for less than I owe to the bank? Do I have to pay the underage at closing or do I have a remaining balance on my loan to continue to pay?
    0 Votes

    • 35x35
      Jul, 2011
      Bill
      What you described is called a deficiency balance in the home lending and legal fields. Because of the collapse of housing prices, it is common for homes purchased in the early to mid 2000s to have market values less than the balance of their loans. See the link I just mentioned to learn more.
      0 Votes

  • 35x35
    Jun, 2011
    Oranut
    If you owe more than your house worth, you could check if either Fannie Mae or Freddie Mac owns your loan. If yes, you could get a special program from them. They allow you to refinance up to 125 Loan-to-value. Hope this helps!
    0 Votes

  • 35x35
    May, 2011
    Edward
    Hi, I purchased a home in 2005 for $445,000. I currently have two loans on the property. 1st is a standard 30 yr fixed at 5.75% with a balance of $349K. The 2nd is a home equity line of credit, current rate is 4.75%. And the balance is $69K. Total owed is $418K. The homes in the area are now selling for $325-$350K. I do have enough money in savings to pay off the 2nd loan off...BUT, should I? Does it make sense to do that? I was thinking, I could pay off the second and refi the loan into a better rate with better terms as my loan does include impounds. Just not sure if it is a good idea to empty a good chunk of my savings to do it. Any advice you can give would be greatly appreciated. Thanks
    0 Votes

    • 35x35
      May, 2011
      Bill
      Usually, I advise people to break-down their financial questions into the smallest possible piece and work each problem (usually a debt) separately. In your case, you need to look at the big picture, and look at:
      • Your expected family income in the short- and long-term.
      • Your retirement saving.
      • Your short-term savings.
      • Household budget, and how quickly you can replenish your savings.
      • Investment portfolio, and its rate of return.
      • How quickly, realistically and honestly, you believe property values will rebound in your area.
      • Any upcoming expenses, such as a child entering college.

      My point is, you need to answer your refinance question in the context of your entire financial plan. If you do not have an overall financial plan, consult with a financial planner in your area who charges you directly for his or her time. So-called financial planners who work for investment brokerages receive a great deal of training in financial planning, but also a lot of training in selling people on their employer's products and services.

      0 Votes

  • 35x35
    May, 2011
    Hannah
    Hi, I am trying to buy a short sale property and the seller verbally accepted my offer last week. I was waiting to receive the paperwork so we can go into attorney review. My realtor called and said the seller is now trying to refinance, so our deal is being put on the back burner. So is it true that someone who has been selling their house as a short sale for the past two years can decide to refinance at the 11th hour? Shouldn't there be more pressure from the seller's bank to sell? Thanks!
    0 Votes

    • 35x35
      May, 2011
      Bill
      A short sale is voluntary for the homeowner and the lender. One can encourage the other to strike a deal, but there can be no coercion. Until there is a signed contract, there is no sale.
      0 Votes

  • 35x35
    May, 2011
    Jen
    I have filed for bankruptcy almost 3 years ago Chapter 13, and did not include my mortgage or home equity loan and am curent by my mortgage for $136,000 is much higher than my home value of about 70,000, what are my options for lowering my payments since I'm in bankruptcy...are there any?
    0 Votes

    • 35x35
      May, 2011
      Bill
      You are asking the wrong question. If your mortgage balance was $70,000 and the house was worth $136,000, would the lender have the right to expect a larger monthly payment because the house increased in value? Obviously, the answer is "no" because when you signed the contract for the loan the monthly payments were spelled out in the contract and neither the borrower nor lender could vary the payments unilaterally.

      The question you should be asking is, "Is my monthly mortgage payment causing me financial distress?" If the answer is yes, then your attorney may be able to ask your bankruptcy trustee to add the bankruptcy to your chapter 13 plan. However, given that you are almost 3 years into what I am guessing is a 5-year plan, then the trustee may look upon such a request with a very critical eye. If the answer to the financial distress question is "no," then do not expect the trustee to add the mortgage to your chapter 13 plan.
      0 Votes

  • 35x35
    Apr, 2011
    Anthony
    I bought a house three years ago. I currently owe 165,000 on the house which is worth 140,000. I can make payments on the house, however, I found another home in my area that is selling for 154,000. I am interested in this house as it is a 4 bedroom and my current house is a 3 bedroom, and would like to eventually have a third and possibly fourth child. Anything I can do?
    0 Votes

    • 35x35
      Apr, 2011
      Bill
      You have several options but the best I see is to:
      1. Do a short refinance to get the principal below your loan amount.
      2. Sell the house you do not want
      3. Buy the house you do want

      Be mindful that in certain parts of the country it is a buyer's market, and even though your present home may have an appraised value of $140,000, it may take months before it sells at that price, thanks to all of the foreclosure and short sale bargains extant. But again, each market is different, and what is true for the housing market in Las Vegas is not true in Seattle (to pick two cities at random).

      0 Votes

  • 35x35
    Nov, 2010
    Anna
    My mortgage is about $70K over my current home value. My family income is $160K per year. We do not have problems to pay the mortgage. We want to move to another area and need to sell the house, but the buyers do not want to consider if the price is higher than average in this area. So, if we sell for less price we have to bring the difference to the bank - $70K-100K. We talked to the bank and they did not let us short sale, because of our income. Then we tried Home Affordable program - they denied for same reason - income. We wanted to refinance for lower rate - and were denied due to apprised for less, and told to bring the difference to closing. We pay the education loans, mortgage, taxes (we are in bracket of 28%), bills, insurances, cars, pension funds, etc, and have no savings at all. Seems we are not qualified for anything due to income.
    0 Votes

  • 35x35
    Jun, 2010
    Bill
    I am unaware of any mortgage relief or short sale programs designed to assist the disabled. I invite readers to offer their thoughts and point us to such a program.
    0 Votes

  • 35x35
    Jun, 2010
    Paul
    I bought my home in 2002 and am now about $30000 up side down in my mortgage I live in Michigan where it is cold 9 months of the year and i have a back injury and am on disability. the cold causes allot of pain i would like to move to a warmer climate to improve quality of life. I can't figure out a way to do it with the pickle i'm in with my house. Are there any programs out there for the disabled or anything else i can do?
    0 Votes

  • 35x35
    May, 2010
    Bill
    A home is considered a capital asset. Use Form 1040, Schedule D to report sales, exchanges, and other dispositions of capital assets. You need to report gains, but not losses. The loss on the sale of a personal residence is not deductible. Regarding the mortgage debt forgiveness, see the Bills.com resource Mortgage Forgiveness Debt Relief Act for details and links to more information. The Mortgage Forgiveness Debt Relief Act is intended to help people who sold their principal residence, and the property here was not your principal residence for the last two years. However, it was your principal residence, and therein lies your question. Consult with an attorney who has experience in tax-related matters. He or she will be able to review your situation in detail, and will offer a precise opinion on this matter.

    Regarding a short sale on a VA loan, the U.S. Department of Veterans Affairs Loan Guaranty Home Loan Program Web site offers two documents that may help you get started with either a short sale or deed in lieu of foreclosure. See the VA document Veteran Borrowers in Delinquency: Quick Reference Sheet, and VA Making Home Affordable Program. To gain an understanding of what banks can do for you, skim the VA document Servicer Loss Mitigation Program, which describes the steps that banks with VA loans must take in a short sale or deed in lieu of foreclosure.
    0 Votes

  • 35x35
    May, 2010
    LeeAnn
    Hello, My husband and I are currently trying to short sale our house that we bought for 195,000 in 2007, and it is now worth approximately 145-150,000. We originally put 10% down and then invested another 10,000 into upgrades for the house. We had to move for work the year after we bought it, and so had to rent it, as we wouldn't have made any money from selling it. We currently take a loss of about $300 a month from the difference between the mortgage and the rent. We have not missed any payments, and are currently looking at a $30,000 loss from the cash alone we originally put into the property. Can we at least deduct this when we sell or do we just have to eat it? Also, are we able to claim the debt forgiveness act for the short sale, even though we've had to rent it to avoid foreclosure? Our mortgage is currently 173,000 with a VA loan. We are hoping the lender will be more apt to do the short sale as the VA guarantee's the loss of approximately 30,000. What do you think? Thank you
    0 Votes

  • 35x35
    May, 2010
    Bill
    One of my favorite cliches is "Hindsight is 20/20." Had everyone known for certain when the housing bubble would burst we would have acted accordingly, and the appraiser may have valued the property differently. Had you known for certain you would divorce you never would have bought the house or walked down the aisle. On the other hand, if the appraiser was corrupt and conspired with the loan officer to overvalue your property, you may have a cause of action for fraud against one or more of the conspirators. Consult with an attorney in your state if you believe there was negligence or fraud involved in your 2008 refinance.

    Regarding your primary issue, see the Bills.com resource Home Affordable Foreclosure Alternatives Program (HAFA) . Ask follow-up questions on that page.
    0 Votes

  • 35x35
    May, 2010
    Nan
    We bought our house in 2004 for $104,900 with a 5yr fixed mortgage. In 2008 we refinanced - the house was appraised at $124,500 and we were encourged by our lender to roll some of our other existing debt into the refi. My husband and I are now splitting up and need to get out from under the house. We owe $114,700 and our relator thinks it would currently appraise for between $110k & 115k. She tells us that it should have never been appriased at $124,500. Neither one us can afford the house payment on our own. We also have approx $44,000 of other debt we are trying to pay off. If we sell the house for $115,000 we will take an approx $13,000 loss with all of the realtor fees. I am at a loss as to what we should do next.
    1 Votes

  • 35x35
    Apr, 2010
    Bill
    See the instructions for IRS form Schedule E to learn how to report rental income and loss.
    0 Votes

  • 35x35
    Apr, 2010
    beth
    I am active duty military and had to relocate to midwest. My house wouldn't sell, so I rented, but I had to rent for 300.00 less than my mortgage due to the down turn. Can I claim/deduct this loss on my taxes? ex. Mort is 1800 and I rent house for 1500. Thanks in advance.
    0 Votes

  • 35x35
    Feb, 2010
    Bill
    As I have written above, the best option is either a short sale or deed in lieu of foreclosure. Read the Bills.com resource Deed In Lieu Of Foreclosure vs. Short Sale for details. Your alternative is foreclosure, which is a last resort.
    0 Votes

  • 35x35
    Feb, 2010
    Lauri
    My home is worth $20,000 less than what I owe and I need to sell and move cross country to be near my mother, what options do I have
    2 Votes

  • 35x35
    Feb, 2010
    Bill
    Your best option is a deed in lieu of foreclosure or a short sale. You can always allow foreclosure, and then clear up the deficiency balance with a bankruptcy, but both of those will negatively impact the credit report of the spouse who signed the mortgage and then filed for bankruptcy. Talk to the bank servicing the Florida mortgage to discuss a deed in lieu of foreclosure.
    0 Votes

  • 35x35
    Feb, 2010
    SHERRY
    Hi and thanks for your help. We moved out of state to NY a year ago. We rented our home in Florida for $500 less than our mortgage payments. Now our home is worth even less and the surrounding homes are renting for less. We know that our renters want an adjustment to lower the rent. We currently are in NY where our rent is the same as our current Florida mortgage (1700) and had to relocate due to work. We can't keep kicking in that additional 500 monthly nor do we qualify for Obama's HARP plan (as we must live in the home we own). The house is now valued at around 88,000 what we payed for it (8 years ago) was 142,000 and our loan is a refinanced loan that we tacked an additional 60,000 to. Making our loan be a 202,000 loan on an 88,000 house. We can't save money to buy a new home due to additional expenses and can't even sell the house because the sell wouldn't even cover what we owe the bank. We've never been late on Mortgage (in almost 8 years) or rent but don't have the greatest credit. Our income is about 125,000 a year. Credit card debt is around 7,000 and car loans 18,000. We want to eventually buy another home but can't get ahead enough to get a down payment and now have lost the equity in our house. What do we do about that house? thanks for your help!
    0 Votes

  • 35x35
    Jan, 2010
    Bill
    The least-damaging option is either a short sale or deed in lieu of foreclosure. Read A Deed In Lieu Of Foreclosure vs. A Short Sale for details.
    1 Votes

  • 35x35
    Jan, 2010
    Margaret
    we bought our condo in Massachusettes in 2007 for $261,000. My husband and I both now work in Connecticut and have long commutes. We are having a baby in June and want to sell and move to Connecticut closer to our jobs and family. We owe about $248,000 and don't think we can sell our condo for that amount. Most recent sales in our condo community have been lower then that. What are our options that won't hurt our credit score?
    0 Votes

  • 35x35
    Jul, 2009
    Bill
    You face several tough issues that I can't explain adequately in this space, so follow the links I provide here to learn more. Let us deal with the mortgage first. Go to the Home Affordable Refinance Program Web site to see if you qualify for this program. An option, as you suggest, is a Chapter 13 bankruptcy. If at all possible, stop a foreclosure. Regarding the credit card debt, learn about your debt consolidation options, including negotiating a lower interest and principal either yourself or with the help of a settlement company. Regarding your concerns about losing your house and car, you need to understand your rights. Read my Advice on help with bills in collections to learn more about the collections process.
    0 Votes

  • 35x35
    Jul, 2009
    Vivian
    We purchased our home in 2006. We owe about 50,000 more on it than it is worth. We also recently purchased a caras our other car is a 1991. We tried to make things work using credit cards hoping the market would turn around, it did not. So, the credit card companies have lowered our limits, doubled or more our APR and we are on the verge of bankrupsey. If we do decide to go that route, will we lose our home and car? We do have enough income coming in, we are both retired, to pay our car and mortgage.WE might also be able to pay off our credit cards if they would lower our APR's.
    0 Votes

  • 35x35
    Mar, 2009
    Bill
    You are not alone in this predicament, a lot of home owners are faced with the same situation. You may qualify for the Home Affordable Refinance Program You can also discuss the short sale option with your lender. In a short sale, a lender would accept a lower amount than the balance of the loan. A short sale has to be approved by the lender.
    0 Votes

  • 35x35
    Mar, 2009
    Anna
    I purchased my home for $199k Feb 2006 most of the homes on my street have now foreclosed and are been sold for under $50k even the new homes are going for only $80k Is there anything I can do?
    0 Votes

  • 35x35
    Feb, 2009
    Paul
    One of the comments said about renting out a room and then deducting the rent from your taxes. How is that, rent is considered income isnt it. Besides the tax benefit is nowhere near good enough, at least in my area (oklahoma) to bother reporting. Btw, having a friend or (whoever) share the bills is not rental income, which I have done also.
    1 Votes

  • 35x35
    Jan, 2009
    Bill
    You are not alone in this situation, given the mortgage meltdown, a lot of folks are finding themselves owing more that what their home is worth. Refinance is going to be difficult, but you should ask your lender to see if they will be open to do a loan modification or re-structuring so that you are able to afford your payments.
    0 Votes

  • 35x35
    Jan, 2009
    Lorry
    I live in NJ. Bought a townhouse in 2006 for $275K @ 6.50%. Put $25K down. I now owe $214K on my mortgage. Shortly after I took an equity loan to pay a higher monthly car payment, 20K remains. My townhouse is now worth less than what I owe. Some have sold in my development for less than what I owe. And currently there are a few on the market. I did have my townhouse on the market a few times but no bites. Now my financial situation is different, I have my mortgage payment, the equity payment and 2 credit cards with high amounts on them. I'm currently not using the credit cards unless it is an emergency. For a year I have been moving money from a savings acct over to pay my monthly bills. My savings is just about dry. At that point I have nothing but pay check to pay check to pay my bills. I do not make enough to cover my monthly bills. I am looking for a P/T job, but have been unsuccessful so far. I have been told I can't refinance because I owe more than the worth of my home. I don't want to ruin my credit, but I no in the near future I will not be able to meet my bills. Please help with some advise. Thank you.
    0 Votes

  • 35x35
    Jan, 2009
    Sam
    You need to consult with an attorney licensed in your state to determine what the possible consequences of allowing your home to go into foreclosure would be. In many states, a mortgage company can come after former homeowners if the foreclosure sale does not cover the full balance of the mortgage, which it frequently does not. Given yours and your wife's age, I assume that you are retired and on a fixed income; if that is the case, then the likelihood of the mortgage company trying to pursue you after foreclosure would likely be greatly reduced, as most forms of retirement income (Social Security, most pensions, etc.) are exempt from attachment by judgment creditors. If you do not have any other substantial assets, the creditor may have no way to collect even if it does try to pursue you for any remaining balance on your mortgage after foreclosure (called a "deficiency balance"). Since you owe more on your mortgage than your mobile home is worth, your monthly mortgage payments are not currently building equity, and you may do better to rent until the housing market improves and you are able to purchase again. Again, I strongly encourage you to consult with an attorney in your area to discuss the financial difficulties you are facing to help determine the best way to move toward a prosperous future.
    0 Votes

  • 35x35
    Jan, 2009
    WILLIAM
    Purchased dbl wide Mobile home in 55 and over park, 1997. Paid premium and mortgaged w/apr loan thru wash. mutual, they sold loan to green tree cpl years ago. Park rental has grown from $250.00 per month to $500.00. Owe $21,000.00 on home, now worth appox. $16,000.00. Park has over twenty empty spaces, no one wants to buy existing homes because of rent and attitude of corp. ownership of park. We want out, what do we do? Don't want to walk away from mortgage, but will if need be. I am 72 years old and a veteran. my wife is a few years younger.
    0 Votes

  • 35x35
    Dec, 2008
    Bill
    If you loan balance is more than what your home is worth, then it is unlikely that you will be able to find a lender that will be willing to refinance. You can refinance only your second mortgage, but again, you will find that to be a difficult proposition considering you do not have any equity left in your home.
    0 Votes

  • 35x35
    Dec, 2008
    Alice
    Hi, I currently have two home mortgages i would like to combine into one but my problem is i owe more than the house is worth (it is a condo)well my problem. is there any program that will do a refinance under this conditions? Also one more Question is it possible just to refinance one mortgage my 2nd one which has a big intrest rate the loan is only 57000. Thank you Alice
    0 Votes