My problem is simply i cant afford this hous anymore.

Asked by Ali, Suffolk, VA Wed Apr 8, 2009

My orginal loan is adjustable, it started from 1100.00 and now its 2200.00...... i have been talking to my lenders for about a year now, at first i started DEED and LOWE, and then that got stopped (( it was my fault)) then someone wants to buy it but unfortunatley they opted out, and now for the past two months i started the deed and low again..... im really getting frustrated over this, what should i do if they decline my last request. Im thinking of just stop paying, but will the bank sue me? or what? please help

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13
Betty Costa, , Las Vegas, NV
Fri Apr 10, 2009
Do not give up your home!
Go to Naca.com, a non-profit organization that helps homeowners keeping their homes. You need to attend one of their workshops and then answer a fairly long questionaire online; once you have this done, call to make an appointment with one their counselors. I've done it but still waiting for the workshop. Cannot guarantee positive results but keep the fight.

Good luck
1 vote
Sandra Furht, Agent, Boca Raton, FL
Fri Apr 10, 2009
Hi Ali,
You are no alone in this situation, you will find some strategies to keep your home.
*Refinancing, Forebearnce, loan modification, short sale. Just contact an experience realtor in your area, or try to contact the Loan Modification department of your lender, will be a very consuming time but it is better in a long term for your credit, do not give up your house to the bank it is a easy solution but negative for your records. Just try to keep your home. Good Luck!!!!
1 vote
Natalee Thur…, Agent, Marysville, WA
Thu Apr 9, 2009
Call your lender and ask for the "Loan Modification" department. They should work with you. I did it for discovery purposes and ended modifying my own loan to 4.375% and saving $800.00. If you have any questions on this, please feel free to call me ( Cost you Zero ) and I can tell you how I did it. 425-343-5225
I am more than happy to do, "Pay it Forward" Questions and Answers. www. Washingtonhomesold.com
Deed in lieu is actually considered a voluntary foreclosure.
1 vote
Barbara Capo…, , Frisco DFW Metroplex
Thu Apr 9, 2009
I would suggest you get an experienced Realtor, that is use to dealing with the banks. Can be beneficial to all involved! They are time consuming for a Realtor. However I do alot of them, can take 30 days to 6 months, sometimes even longer. Good luck!
1 vote
George Szkup, , Tucson, AZ
Thu Apr 9, 2009
Ali,

Do not try to resolve this issue all by yourself. By all means consider Short Sale - talk to a realtor!
For all other options talk to a knowlegible consoler - go to my Blog http://www.DestinationTucson.biz scroll down to icons on the bottom and click on icon YOU? - you will find there useful information and links to various sites where you will find government approved assistance.
Good Luck
George in Tucson
1 vote
MAP1922, Other Pro, Newport, OR
Thu Apr 9, 2009
As an attorney representing sellers in short sales, and as a foreclosure mediator - I am making a few suggestions. The first is to talk to a knowledgeable attorney in your area for advice. The process you are writing about is called a Deed in Lieu of Foreclosure, meaning the bank will take title without the expense of the foreclosure process. Banks do not like pursuing this route because of many possible title issues.
Short sales are usually preferable to a deed in lieu of foreclosure - and usually a very good option if the lender will consider it. If you are currently speaking with the loss mitigation officer, ask if this is an option. Short sales; deeds in lieu of foreclosure; are both less expensive to the bank than going through a foreclosure proceeding.
I do not know if Virginia is a judiciary or a non-judiciary foreclosure state, but the process is governed by statute and a knowledgeable attorney should assist you so you don't feel so lost.
Best wishes,
Michele Peters
Law Offices of Michele A. Peters
Web Reference:  http://www.mpetersesq.com
1 vote
Vicky Chrisn…, Agent, Purcellvile, VA
Wed Apr 8, 2009
WAIT! New legislation.... new options available. Who is your lender? What is your interest rate? Do you have one loan or 2? How far upside down are you?

Without knowing these answers, I can't give you personal advise. But, if you like your home, and want to keep it, let me throw 2 ideas at you....

1. An FHA Streamline refi is available if you've been making your payments on time. That's pretty much all they look at to determine your eligibility - not debt to income ratios, not savings, not credit, not even if you are WAY upside down in value. The only catch is that it (a) must make sense (most people can lower their interest rate 1-2% which can be a significant savings each month); (b) you can't finance more than you originally financed. So, if you originally financed $105K and the current payoff is $103K, then you may need to pay some costs out of pocket for closing costs. However, if you originally financed $105K, and your current payoff is $95K (even if the value of the home is $50K), this should work well for you.

2. Through new legislation, banks now have new incentives to do refis or loan modifications. On the new HAS (Housing Affordability and Stimulous) refi's the loan can't be more than 105% of the current value of the home. That makes this option tricky for many people - BUT, here's who it does work for... anyone who did an 80/20 loan package with an 80% first mortgage and a 20%(or less) second mortgage... because these new HAS refis will subordinate the 2nd. In plain terms it means that if you have 2 loans 1st - $80K, 2nd, $20K and the value of the home is $75K... you can now refinance that $80K loan... the $20K loan will be your primary (and that will make your lender very, very happy), and then you have the new refi as your "second" for $80K... the value here is that ideally, your interest rate would be dropping enough that you will be saving a lot on you monthly payments.

I don't know much about the HAS loan mod process, but the inside scoop I am hearing is it is still very case by case and we're not sure how it will all unfold. But, hopefully one of these two refi options will work for you.

If not, before you throw in the towel, please contact the nonprofit at http://www.nw.org for help. They have HUD approved counselors to help you and there is no charge. Whatever you do, do not pay for someone to "negotiate" with your bank for you.

If all else fails, do a short sale before you allow a foreclosure. The benefits are HUGE comparatively speaking. But, please try these other ideas first.

I am sorry I am not in your market, but if I can refer you to someone, don't hesitate to call... vchrisner@kw.com
Web Reference:  http://www.vickychrisner.com
1 vote
Pat Mulligan,…, Agent, Chesapeake, VA
Wed Apr 8, 2009
Ali:

Do not consider foreclosure or "deed in Lieu of Foreclosure ( I think that is what you meant)" before talking to a Realtor knowledgable about Short Sales. A "deed in lieu of foreclosure" is just the same as foreclosure except you are saving the mortage company the trouble of filing, and will effect you the same: remain on your credit 7 years, in publi reords 10 years, lower your credit sore about 300, and cause you to lose your seurity clearance, or the ability to ever get one. It an also effect your employment, or the obility to obtain employment, as many employers classify a foreclosure as seriously as a serious misdemeanor or felony.
Giving up your house voluntarily does not give you any benefits.

You have several options, inclusoding short sale or loan modification. Talk with someone who can go over those with you. I am in a class right now for my CDPE (Certified Distressed Property Epert) designation. It is very thorough, and even though I represent sellers and biuyers in short slae situations all the time, I am learning much, much more. I suggest you find a local CDPE to work with you.

BTW-- Never pay ANYBODY to help you in advance-- there are alot of scammers out there.!

Don't lose hope-- you are not alone!

Pat
1 vote
blaison samu…, Agent, Santa Clara, CA
Wed Apr 8, 2009
Ali,

If you can't afford the payment and the lender denied your loan modification then the best option is short sale. Find a realtor who is experienced in short sale who can help you to sell your house so that you can avoid foreclosure from your credit. You can buy your next home in 18-24 months after successful short sale. So, don't get frustated, just take action immediately to do short sale.

Blaison Samuel
Certified Short Sale Specialist
1 vote
Will, Both Buyer And Seller, 32207
Sat Apr 11, 2009
Sell the home and make sure that the purchase contract (if this is going to be a short sale) has a clause that the bank will not file a deficiency judgment against you after the sale of your home AND another clause stating that they will report your mortgage on your credit as paid in full along with a letter to back it up (sometimes the banks don't updated the bureau correctly) and go to the IRS website and fill out the proper forms of hardship so they don't charge you income taxes on the difference of the sale amount and your mortgage. If you do a deed in lieu, you will owe income taxes on the whole mortgage, it may be harder to plead a hardship with the IRS when they will see on record you had an offer to purchase your home and it will will report negatively on your credit report. You are saving time and money for the bank by doing a deed in lieu when you could just force them to foreclose on you which allows you to live in the home longer and save your money.

It sounds that you are afraid of the offer not going through and you want an easy way out, but this is a home investment that you made and although people may paint home ownership as a pretty picture, in some cases its not. My direct advice is to suck it up, take the deal (short sale or not), apply the simple techniques indicated above (and get an attorney to assist you!) and get this house behind you so that you can move on.

And think twice before you attempt to purchase your next home (which will be A LOT harder if you do a deed in lieu).

Good Luck!

Will Concord
0 votes
Ali, Home Seller, Suffolk, VA
Fri Apr 10, 2009
thank you all very much for giving me helpful answers. I originally wanted to give up the house, i dont want to keep it anymore. Today i recieved a phone call from my relator saying that someone has put offer to buy the house (( note, someone else did offer to buy the house three months ago but my lender didn't like the offer so they declined it)), and now i dont know if i want to go through with this offer and switch from deed and lieu because i dont want to start all over if this current guy back off or my lender doesnt like the offer. however, this offer is what the lender asked from the first offer. what you guys think about the prices of homes, has it went down from three months ago, and if this new offer which is better than the first will be ok for my lender.......
thank you
ali
0 votes
Will, Both Buyer And Seller, 32207
Fri Apr 10, 2009
You are able to modify your loan whether your qualify or not under the new government program. The difference is whether you do it yourself (which obviously takes forever) or have professionals do it for you. We here at VanDyk Mortgage have streamlined the process of loan modifications to which we take a simple application from you along with statements to prove your hardship and a hardship letter explaining why your can't afford the home. We have the mortgage reduced, the interest reduced or both on your mortgage(s). If you like what the bank offers, then you pay a reasonable flat fee and if you don't like what your bank offers, you don't pay a dime. Why do we do this? Because many states have passed laws that do not allow companies to charge an upfront fee for loan modification, so use this to your advantage. Why lose your house when you don't have to? It doesn't cost you a dime to try and you have nothing to lose and the work on your part is minimal.

If you want more information, you may call me at 904-371-3581 and ask for Will Concord. I'm a mortgage broker who's motto is, "Treat others as I would want to be treated." I keep things very simple in a complicated life. Would you rather file a law suit by yourself, or pay an attorney with the expertise to get it done sooner and easier than if you were to do it? Its the same thing with the only difference is that you don't pay an attorney if you like the results. (Wouldn't it be great if that was the case?)

Short sales are okay if you can find a buyer and the bank agrees to it, but watch out for the deficiency judgment and the taxes you have to pay because your written off mortgage is now considered income. Want to know how to minimize the damage in the worse case scenario? Call me today.

I wish you well and the best of luck on whatever choice you make.

Will Concord
VanDyk Mortgage
841 Prudential Drive
12th Floor
Jacksonville, FL 32207
904-371-6581
0 votes
Pamela Nicke…, , Las Vegas, NV
Fri Apr 10, 2009
Ali -

In a previous answer to your question, some misinformation was posted. Here's the quote from the other posting: The subordination information is totally incorrect. The 2nd lender will have to agree to subordinate to the new 1st lender. The new 1st lender would never allow themselves to become the 2nd lien holder. So, in the example she used, the new $80K loan will return to being the "primary" loan because the $20K will be required to subordinate (be the 2nd lien holder) once again to the larger, first. One plus to this refi is that the CLTV (closing loan to value - the total of the both loans together), as of this posting, does not have a maximum limit. However, I'm certain the 2nd lien holder will not want to agree on subordinating if the CLTV ends up being excessive.

I hope your current lender (who is it?) will do a loan modification for you, or maybe you qualify for the Stimulus refi. Go to http://www.fanniemae.com and http://www.freddiemac.com to find out if your mortgage is owned by Fannie Mae or Freddie Mac. I wish you success with this!
0 votes
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