I'm in too deep, what do I do?

Question

4 years ago my wife and myself purchased a home in Ma. Needless to say, We paid alot. At the time, the market was hot and we had relocated from a market which had a significantly lower home prices. In order to continue living in the lifestyle we had grown accustomed to, we did some "creative financing". We took out a no interest loan for the first 2 years and were lucky enough to refinance before the market cooled down. We also took out a Home equity line of credit. We were able to secure good interest rates on both but the monthly output is substantially more. Combine this with a few life changing events, we find ourselves on the verge of forclosure or bankruptcy. Are there any better options available? If not, which of the 2 options will be easier to recover from? By the way, selling the house is out. It will not appraise for what we owe.

Answer 1

Keep in touch with your current lenders and let them know if you think you are going to miss a payment. They will do their best to work with you and may be able to defer a payment or two to help you out.

Meanwhile, check with an attorney about your rights to bankruptcy. The laws have changed drastically recently. He/she can also counsel you on forclosure issues as well.

From a mortgage underwriting standpoint, it takes 2 years after a BK to finance someone through FHA or conventionally and 3 years after a foreclosure. Try to stay away from sub-prime "creative financing". It will only hurt you in the long run.

I hope things work out for you.

Answer 2

They are very different. Bankruptcy will eliminate all unsecured debt, including the mortgages that exceed the value of the home. That's likely to still be pretty high.

Foreclosure means you lose the house, and might still owe a lot afterward if it doesn't sell for what you owe, which sounds likely.

There's a third option. Find an attorney that understands how to do "short sales". If you do it right, you sell the house, and the mortgage companies take whatever it sells for, less unavoidable expenses, and you're clear.

Answer 3

A short sale may be an option. It means you sell the house and give the lender what the proceeds are, even if it is less than the loan amount. The lender must agree to this ahead of time.

Answer 4

You can still sell the house and have your realtor arrange a short-sale with the bank. This is where the bank accepts less than the full amount owed. This will hurt your credit far less than foreclosure. If you need a referral to an agent who can help you with this in your area, e-mail me at [e-mail]

Answer 5

First off, I am so sorry for what you are going through. There are SO many options available to you, that many people are not aware of. I am not someone trying to "get" something or send you to the following site for "something". Please visit the site below. It is Absolutely FREE. Please copy and paste your message here in the free forum under foreclosures......I am POSITIVE someone will answer and help you or lead you in the right direction, so not only will you be able to Not file bankruptcy or foreclosure, but you will be able to save your credit and be able to get the right kind of loan that is affordable for you. I hope this helps! Sincerely, Michele

Answer 6

Call your lenders and ask them. If you call them first, before they call you, there will be more options available. They've worked with people in your position before and have tricks up their sleeves. Remember, the bank does not want your house. They want a workable solution, too.

Answer 7

This is more of something you should talk to with a lawyer