Please help!- Long complicated question regarding mortgage, taxes and financing-what can I do?

Question

I purchased a home 18 mos. ago. I financed using ma's credit-mine is BAD, my $- I believe income undisclosed. Loan under ma's name- deed states we are joint tenants w/right of survivorship or something like that. I have an 80/20 loan w/rates of 12.5 and 8%. I've made all pmts with my ckg acct, had 2 late pmts <20days ea. on the larger loan.
I live in cook county, il, my taxes went up 138% (sr exempt prev yr) I will be slammed with the taxes for last yr + proj taxes for nxt yr on Jan 1-my lg mtg will double! I don't want to lose my home, what options do I have? Mom turned 65 in Feb this yr. I am on disability from work rt now, but sufficient income to make pmt before increase. Can the loans be combined or something w/lower interest? What about this PMI thing when do they stop charging it? PLEASE HELP!

previous owner was a sr citizen, my mom did not turn 65 until this year- anyone have any exp with Indy Mac bank as a lender? My mtg holder.

The taxes are paid into an escrow acct, so I am negative for 2006 and have to meet projected 2007 taxes in pmt. Does a tax credit appeal come through right away?

Answer 1

Your 2, 20 day lates will not even show up on your credit report it usually only reports at 30, 60, 90 days late. But you said your credit was lousy to begin with so that probably does not even matter one way or the other.

Did Illinois declare you ineligible for the lower tax rates? Why?

Why didn't you pay last years tax and now find yourself with 2 years of taxes to pay next month?

You need to talk to your lender and see if they will do a short sale or something so you can move on. You can not afford the house if you are not making your tax payments on time etc.

What a waste if Mom does not have enough income to take advantage of the tax breaks as you CAN NOT since the mortgage is in her name. Hopefully you knew this or the tax man commeth it is all recorded by her social security number and sent to the IRS under her SS number.

Answer 2

PMI is private mortgage insurance and you pay that until you have 20% equity in the home.

With the late payments, it is highly unlikely you can refinance into a lower interest. At 12.5% and 8%, your mom's credit must not have been top notch either, unless it was a stated income loan.

You should still carry the senior exemption if mom's name is on the house, check with your tax collector on Monday.

From the gist of your post, you really don't sound like you know what you are doing. First, you have bad credit, you don't exactly know what you have on the mortgage or on the deed, you don't understand PMI, etc..

You need a lender to explain to you in terms you understand what your options are. Since mom is the mortgagee, she will have to be with you. Stated income loans are going to be higher interest, so if you can work your way into a regular mortgage, that may help with the interest rate.

Your current lender may reduce the interest, it doesn't hurt to ask.

Don't delay on this, get going ASAP or you could be in bigger trouble.

Answer 3

I am wondering why you don't still have the senior exemption on the taxes. Does your mother not live there? If she doesn't perhaps she should!

PMI is dropped only after you have 20% equity in your home, which you do not have as the market in Cook County has been fairly steady. Even when you do get to that point, you have to fill out a lot of paperwork and have the house appraised to get it dropped.

You will probably not be able to refinance at this point. You don't have the credit rating or the equity. Money has only gotten harder to borrow since you bought the house.

Stay away from investors-they are looking for bargains. They have NO REASON to help you!

Good luck!

Answer 4

You appear to be one step ahead of a BK or foreclosure on the home. You were aware that you would not be eligible for the Sr. tax credit and did nothing toward saving for that eventuality.

YOU had bad credit, ma's is pretty horrendous too, and yet you made another credit decision that was and is becoming even more disastrous. 100 percent at 12.5 and 8 per cent wow doesn't that just reek of irresponsibility to even you? Plus you were even late 2 payments in 18 months time.

Now you are depending on a tax credit coming along and saving you and if it doesn't and in time...

Something about this leads me to ask, does Mom even know what you did?

Who did deduct, if applicable, the interest and taxes on their tax return?

Have you left Mom in a vulnerable place for her own future by having been LISTED as the owner of this property?

Good luck, you will need it.

Answer 5

If you went 80/20 that basically means you financed 100% of the home, but in the last year home values have dropped dramatically, as it has only been 18 month since you purchased your home you have in fact become in a negative equity situation. . 20 days late on two payments is not that bad as they did not hit the 30 day mark. But again you have to look at the decrease in your income, compared to your expenses. The PMI will not stop until you have a vested interest in the home of at least 20%. right now that is not a possibility. Since your home is most likely not worth what it was appraised at when you purchased it see if you can get the tax base reappraised to lower your tax rate. ie file an appeal

Answer 6

I recommend that you hire an attorney who specializes in real estate law.

Your attorney will protect you from the predators that are likely to descend on you.

With respect to the second responder who suggested that you talk to some real estate investors, I recommend that you do not deal with the investors out there who say they specialize in pre foreclosure or anything even remotely like that.

The people in that business are primarily looking for vulnerable people who can easily be taken advantage of because of their circumstances.

Unfortunately the two late mortgage payments will make it impossible for you to refinance at a lower rate unless by some miracle your lender did not report the late payments to the credit bureaus. Some lenders do not.

Unfortunately the real estate market has not appreciated in most parts of the United States in the past 18 months. It is not very likely that you will be able to refinance those two loans into a loan with a lower interest rate.

I do recommend that you talk to your credit union if you or your mother is a member of one, and that you talk to your bank where you have your checking and savings accounts.

Your credit union and the bank where you have your checking and savings accounts will be your best source of information with respect to the options that you may have to refinance your loan.

You attorney will be your best source of protection against the predators that are out there who will victimize you some more if they are given the chance.

Answer 7

You need to have your mother contact the mortgage lender and see if she can refinance.

You are not the borrower so you can't do anything. I suggest that you act fast or your mother's credit will be destroyed if she has a foreclosure on this property. They can also take her current home for payment (if she owns a home) on the foreclosed property.

Good luck!

Answer 8

You sound completely overwhelmed and you have a lot of reason to be but there is always multiple solutions to any problem. I am not familiar with you specific area however you need to begin a plan to act now to find a winning solution for you and your mother. I am a real estate investor, I have a little experience in pre foreclosure and I know a lot of people that may be able to help you. If you would like their contact info you can email me at [e-mail] and I can give you their information from there. You can then give them the details they need without the public broadcast.