Foreclosure in West Harwich>Question Details

Jeanne Heroux, Real Estate Pro in Harwich Port, MA

I can no longer continue making mortgage payments.

Asked by Jeanne Heroux, Harwich Port, MA Wed Oct 17, 2007

I've had my house on the market with agent since July. Had 6 showings, no buyers. Negative amortization loan, principal rising drastically, Principal goes up almost $1000 every month. It does need some work, but I have no money to do it. I may need to let it go to foreclosure. 1st, Should I break current seller agent contract, and try to find a more aggressive agent? Home is priced $75K under Town valuation, and $100K below last appraised price (Dec 2006). Can't try for short sale if no offers, right? Avelo is the lender--should I ask about a Deed in Lieu of Foreclosure? I owe $618K on principal---it is listed for $649K. So, selling as is (still a very nice home with great panoramic views. Monthly payments are too high for me now---think I need to stop making them. Ideas? Help?

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19
Call your lender immediately - explain that you are having a hardship making the payments, They can do many things: 1) let some payments go to the "back" of the loan so you can have a few months "relief"; 2)
they can offer to reduce the payment you are presently making for a few months so you can get over your hardship, if you think you'll be okay on the payment in a few months; 3) Offer a re-finance of the loan to a different type of loan so the payments are not such burden. Due to the recent foreclosure situation and Congress, they are more willing to talk to you and to find a solution because they do not want the house back. When you contact Customer Service - you would like a "forebearance" (if you would like to hold off on the payments due to hardship) - or see about a refinance - BUT if you have a good payment record,
check other refinance options with other mortgage brokers/banks. Please call the mortgage company today - if you miss 3 payments, in Massachusetts, your home goes immediately into "foreclosure", so time is of the essence. As for selling your home, forget what the appraisal is - your home's value is what
a buyer wants to pay and right now it is a buyer's market - A friend of mine just bought a house in Naples Florida for what the loan was - he simply took the loan over. Good luck and let me know how things work out.
1 vote Thank Flag Link Thu Oct 18, 2007
Just when you thought you'd heard of everything, the "Short Re-Fi" comes along. This is why I love this site. Where else would we hear all kinds of weird stuff like this? So, OK, keep us all in suspense!!!
Tell me how to do it! (Or, if I should! LOL)
0 votes Thank Flag Link Sun Jan 6, 2008
Jeanne-
If you are interested in staying in the house, have you considered a short-refi. It is another option you might want to think about. If you would like some information send me an email. Kokomovandyk@gmail.com
0 votes Thank Flag Link Sun Jan 6, 2008
Hi Tatiana,
I did tell the lender I was contemplating not making any more payments, to hopefully gain his attention, but he was nonplussed. The only way they will consider a loan modification or refinance is if I AM in default! Sweet. But I am liking your idea about talking to bankers. (Well, not exactly that part of the idea...I do not like talking to bankers) I did speak with several, already, though, who would not touch this loan, but I think I shall not give up. Thanks for the reinforcement!
In the meantime, I have showings!!!
Jeannie
0 votes Thank Flag Link Sun Jan 6, 2008
First of all what can you afford to pay a month? At this point you must contact your lender. If you have already done so, recontact them. You must explain your situation and tell them your monthly payments are too high and you can not keep up with them anymore. You are contemplating not making them anymore. That should get their attention. Ask them if you can refinance the property and get into a loan program whereby your mortgage payments are lower, such as an interest only loan or a 40 yr. fixed. The advantages to an interest only loan are you can deduct your entire mortgage payments from your earnings on your tax returns and your payments are lower. Current interest rates are below 6%. The question is what would your house appraise at today. Have you consulted local banks? If your current credit score is above 680 and the appraised value of your house is around what you are asking for it, there may be a chance you can qualify for a new loan. The numbers are very tight because you have under 5% equity in the home under this scenario. Some banks still offer 100% financing, but then you will need insurance and the rates will be higher. The idea is to buy time and for you to remain in your home. When one bank says "no", check with another bank. Interest only loans aren't the best. Speak to as many bankers as you can. They may have ideas. In the meantime, keep your house on the market. Ask your bank, in the event of a short sale what price and terms would they accept and price your house accordingly on the market, given their approval.

Tatiana Daniels
0 votes Thank Flag Link Sun Jan 6, 2008
Hi Naima,
I did list it as a rental, and did post the option to buy. Seemed like a good idea. Thank you.
0 votes Thank Flag Link Fri Nov 30, 2007
You can advertize the house for lease purchase or option to buy, that way someone who is shy of buying in your area now, can lease it and then when they purchase it you can give them credit for some of the lease money they paid...

Just another option...
Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Thu Nov 29, 2007
Perry, you're a genius. What a great idea. Semantics are everything. I'll try it! Thank you.
Then I think I'll check out the foreclosures on that website mentioned earlier.
Just to remind myself of where I don't ever want to be.
0 votes Thank Flag Link Thu Nov 29, 2007
People who can afford a $600K house are those who can rent for $3500 a month. They may not want to buy right now because the are afraid of the market. Keep positive and focus on your goal. In fact, run an ad that says "Looking for a $600K house but are afraid to buy on the market... Then rent mine at a steal for $4000 a month."
0 votes Thank Flag Link Thu Nov 29, 2007
I thought of leasing it out, but it does need some work. Even at that, I don't know who can afford $3500/month for a rental (not counting utilities). I even thought of a summer rental, but it is nowhere near the beach. Still, it is a great "nature" location and all, so that has possibilities.
0 votes Thank Flag Link Thu Nov 29, 2007
I agree with Perry. Some people also need to re-read the "community guidelines" for these Q & A forums. No attempt to
advertise here allowed in the answers.
Jeanne, I have followed your case for awhile - please privately email your update from a month ago - would like to hear from you and see what decisions you have made.

Peggy Gabour
0 votes Thank Flag Link Thu Nov 29, 2007
i HAD TO COME BACK TO THIS. No realtor should ever suggest stop making payments on a property and then chck out the foreclosure listings. What???? That is the worst idea yet. I do agree that some banks will have a temporary distressed program but don't forget you could probably ove out and rent the place out for $3K a month and rent another place for $1000 a month and still be ina better financial position. You may not in luxury but at least your financial worthyness will be stronger.

bite the bullet and rent but protect your little nest egg.
0 votes Thank Flag Link Thu Nov 29, 2007
CAn you lease the place out? That may be a better option then stopping altogether.
0 votes Thank Flag Link Thu Nov 29, 2007
Hi Jeanne, you have a lot on your plate. I suggest you sit down and talk to your agent and let him/her know what is bothering you and what needs to be done to sell the home. In the meantime, I suggest you talk with your lender(s) and let them know your situation. They might work out something with you maybe even offer you a mortgage plan that works. Good luck.
0 votes Thank Flag Link Thu Oct 18, 2007
Go to your lender and talk with them about renegotiating the terms of the loan. The lender does not want the property back. See if they are willing to extend the loan and reduce the interest rate so the payments are affordable.
0 votes Thank Flag Link Wed Oct 17, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
Talk to you lender and explain the situation. If you get no satisfaction, ask to speak to a supervisor and keep going up the food chain until you find someone with a plan of action for you. A deed in lieu of is certainly an option.

What has your Realtor said about the situation? When a home doesn't sell, it's usually price, product(your home) or pitch. (The marketing.)

Is you Realtor experienced in short sales? I would drop the price drastically, get an offer in house, and start the ball rolling with the short sale process. Find an EXPERIENCED short sale Realtor.

Good luck! I know it's tough....
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Wed Oct 17, 2007
Cindi Hagley, Real Estate Pro in San Ramon, CA
MVP'08
Contact
I agree with Bill, call your lender first and explain them what's happening, they would much rather re-negotiate the terms with you than foreclose, especially in your case when you have 0 equity. While you are doing that, keep selling. And drop the price to match your balance +fees. drop 20k, it might do the trick. And ask your agent if he listed your property on Trulia!!! email me if you want to chat more about it.
0 votes Thank Flag Link Wed Oct 17, 2007
Jeanne we have disscussed this before.

There does not sound like there is much you can do anymore.

1. Stop making Payments, Save your money and get set-up in apartment. Let`s think save yourself.
If you can move to another residence OK.

2. Do the Short Sale. Drop the price of your home to 600K, and keep dropping the price 5k every week until you get an offer. The Government is in the process of eliminating the Debt forgiveness tax. This will keep you from owning uncle Sam.

3. If you feel you need to replace your Realtor, you probably do. Again we have disscussed this last Month. Interview only Realtors who have done at least two Short Sales this year. Ask for references.

4. Call the Bank tell them what you are doing. Keep communications open with them.

5. Consult your CPA, and a real estate Attorney. NOT a BK Attorney.

Hang in there.
Patrick

Just get it SOLD.
0 votes Thank Flag Link Wed Oct 17, 2007
Mr.P, Other/Just Looking in Arizona
MVP'08
The 1st thing I would do is talk to the bank about a short sale. Explain to them that you can not afford to make payments anymore an that the only alternative will be for them to foreclose. You do not need an offer to have a short sale. Banks do not typically want to own Real Estate. Many banks have started to make short sale arrangements. I would give this a try. Best of luck to you.
0 votes Thank Flag Link Wed Oct 17, 2007
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