Due to a divorce, back in '05, I refinanced in order to give ex his share of equity. A year later I called my morgage broker (snake) to see what I can do because I had CC debt and a $10,000 loan I took over from the divorce. He rolled it all into the loan and put me in a Pay Option loan and told me my payments would be $1,054.00. Steep for me but I thought I could make it. Turns out that payment quoted was for 'minimum payment' negatative amorization.
Closing costs between the two refi's $15,000 + neg. amorization I now am underwater.
I owe $185,000 and due to inability to keep up repairs and decline in market home is probably worth about $165,000 or less. I haven't gotten it appraised yet. There are quite a few houses for sale in my area.
Last year I went to Countrywide for a loan modification when my payments went to $1,776.00 per month. My take home is $945.00 biweekly. They modified my loan to 5.25% fixed for life of loan but I am paying interest only and set to be P+I in another year or so. Payment is now $1,226.00 per month. Temporary solution - I took it. I recently called to see if because of the new laws could I get another modification or possibly principal reduction. They said that I do not qualify anymore since my loan isn't an ARM/Payment Option loan anymore. I think it's a Jumbo?
i know I should be grateful for what I got but they helped get me in this mess. Shame on me for not understanding what I was signing on for but shame on them for approving me. I worked with Acorn (Activist group) who said that they had never seen anything like my loan before. Too numerous to get into but besides the standard predatory lending practices there were some pretty unethical issues as well.
So now I am debating on Foreclosure and bankruptcy or try to sell by owner or a Short Sale? I cannot file Chapter 7 due to partial owner of inherited property that has to be protected. I do not have money to fix up the house (paint/carpet, old kitchen cupboards, etc). I went to 3 attny's and they seem to think Chapter 13 foreclosure is the way to go. Do I make my next morgage payment and hold out for changes by the government? Hold onto my money and let it all go? Keep trying for another modification? After all, they are the ones who modified me into a non-qualifying loan.
Also, my car is a 1996 and I have put about $1000 into it this year in repairs. I know I will need a newer car soon. Do I purchase something now before credit ruined or just hold out and hopefully find a newer 'beater' car?
Thanks for any advice!