Foreclosure...and my situation?
Hi everyone I know I need to talk to an attorney but I would like to hear other peoples thoughts and experiences as well. First of all I am 29 years old...So i think I'm young enough to start over if I need to. I purchased a new build home in Oct 2006 in Columbus Ohio for $163,000. Today i owe $158,000 and all payments are current. For years I have never been late on any bills...My credit was 733 the last time I saw it. I went thru a divorce in Sept 2008. After the divorce I picked up a child support payment of nearly $800 a month...Well $600 for support and half of the babysitting cost which are $200 monthly. So a total of $800 a month. Because of this situation and the current economy I cannot afford the house, rent it out for the $1500 monthly payment, find a roomate, or sell it...I have tried to do all 4 of those things. The house is solely in my name, my ex wife has no connection to the home and she doesn't have any money anyways. I was able to rent it out last may for $1000 a month...which is no where near the $1500 payment, meaning I have to pay $500 a month out of my own pocket every month. My tennants are moving out this May 2009. Similiar homes in the nieghborhood rent for roughly $1000 a month, so to ask $1500 for rent is not going to happen. I have notified my bank and informed them of my situation and that my saving account has significantly decreased since last May as a result of pulling $500 a month to stay current. The bottom line is I cannot afford this house nor do I want it anymore. I tried to do the right thing but is it worth draining my savings to $0 and still losing the home? I have $4000 left in my savings. The home is prob only worth around $120,000 cause of the economy. Wells fargo is not taking me serious because all payments are current. I will probably stop paying after May 2009 when my tennants move out. I'm not left with any other choices. Unless wells fargo would drop the house payment from $1500 to around $700...i cant afford it. And i don't thing they will drop it that low for me. and this is a V.A loan as well...if that means anything What are my options? Should I take my last $4000 and pay off credit cards and other bills instead of putting it into this house that i'm going to lose? Are they going to go after my 401k retirement? Will I get 1099 next year? Will I be sued? The bank would doubtfully deed in lieu? These are questions I have and I will talk to an attorney, but I'd appreciate everyones else's view. Thank you and I'm sorry to contribute to the American foreclosure mess, but divorce has really left me no options
Public Comments
- If you go into foreclosure the bank will just fall back on the VA for their guarantee. The VA however WILL go after you for whatever their losses are. Contact the VA and see if there is anything that they can do to assist you. If your current loan is above market interest they may be able to assist with a re-fi or funnel you to one of the FHA programs that might be able to help you.
- Sounds like you are one of the responsible people who is now upside down on their mortgage. There are programs coming out (announced this week) to help people in your situation by reducing rate & term if you can prove you can make the payment. They say Michigan, Ohio, Florida, Nevada & California have the worst problems with values having come down. This may be something for you to look in to. Since you are obviously not living in the house- why not move back in when your tenants leave? (I'm meaning if you can get this rate/term reduction- that way you would have a lower payment & not have to be paying rent where you are living now). Worst case scenario let them take it, keep all other credit clean & in 3 years you may qualify to own again.
- Loan modification requires it be your primary residence. You might move back into it and try to get it modified. Obamas plan is that the new mortgage be 31% of your income.
