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Loan Options ?

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*** I originally posted this down in the foreclosure/modifications section but not sure it really belongs there...thought maybe posting here it would get more visibility? ***

 

About 5 years ago we walked away from our house and were able to settle with Fannie Mae on a deed-in-lieu of foreclosure.  However, at the time we had a 2nd mortgage on the property.  We were able to work with our local lender and they offered us a loan (with a used car as collateral).  The original amount we owed was appoximately 50k.  The loan was for 10 years but amortized over 5 years (or maybe I have that switched around).  Anyways, our 5 years are up and now the loan matured and we owe around $30k still.  We have never missed a single payment.

 

They pulled our credit and initially indicated our scores do not warrant a renewal of the loan, so wondering what kinds of options we would have?  Unfortunately they have the upper hand since nobody is going to loan us $30k with limited collateral (and scores in the low 600's)...we did indicate we would be able to add our small (clear titled) travel trailer as additional collateral.

 

I imagine they could go after us and attempt to get a judgement but I'm not sure that would get them their $$$ any quicker since we'd probably just end up making payments against that (we honestly don't have a ton of liquid assets just laying around).

 

Any thoughts, options, suggestions?

 

Our last option is to file BK but we can afford payments, just not sure where to go to?

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30 minutes ago, hegemony said:

why are your scores so low? if they were higher would they approve?

High utilization, a few recent lates (unrelated to this loan)...plus the negative status from the missed payments back on the original mortgage when we walked away from it.

 

It sounds like they would approve with higher scores, but they're not going to magically jump 20-30 points that quickly...

 

I'm a bit pissed because they didn't really explain very well that this was in essence a balloon payment loan - if we had known we might have negotiated something different.  But at the time (and still now), they sort of hold all the cards anyways.

 

Edited to add - We do have very good income, just a fair amount of debt we're paying off (along with some back taxes).

Edited by swallman

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what have you done to address the recent lates (e.g., goodwill letters)? Any chance you can sell something or budget to get utilization down? There are some good threads in the money management subforum that might help:

 

 

 

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