Hello all,
I am hoping someone out there has done what I am trying to do and can help me out with a few pointers.
We currently owe @ $270K divided up into a 3 loans. The first being $190K and the other 2 @ $40K. Since the beginning of the recession our family's income has dropped by over 40%. Being that we are in FL and we bought our house near the peak of property values our property has depresiated majorly and is now valued at between $90K-$140K (neighbor with simular house just appraised for $80K). So we are upsidedown by between $130K-$180K.
Now we love our house and neighborhood and are trying to stay put. However do to the massive drop in our income over the past 2 years do to being in the retail sector of the economy we are unable to cover even close to all our bills. We had to stop paying all CC's in June '08 in an attempt to stay current on our mortages, but our income fell more since then and we had to stop paying our second mortgage in Jan '09. So neither of our secondary mortgages have recieved any payments since January. Both secondary mortgages are currently in Charge-Off status. We are currently going through a loan modification on our primary (trying to get the Obama plan, 3% fixed for 30yrs) which would make us able to pay our primary loan with about $100 or so left after all expenses monthly(food, bills, gas, ect....). Both secondary mortgages payments were around $400 (obviously there is no way in hell we can pay even one of these monthly)
My question is how do I go about asking my secondary leanders for Mortgage debt forgiveness? I understand the tax implications but dont really have any other choice other than BK7 which we dont want do to.
My tact I think will be to write each of the secondary leanders explaining to them that this is the best bet for both of us as the loan is non-servicable and if I was to declair a BK7 they would not only get not a single penny back(as all proceeds would go to the primary lender) but they would incure legal fees. If they forgave the debt at least they would be able to recover some of the value through tax breaks.
Has anyone out there done a simular tact with success? If so how did you go about it and do you have a sample letter you could send me that I could use as a basis for my letter to the leanders.
Hope someone out there has an idea for me,
Lost in FL.