Question: We currently have a loan for $244K and a second home equity line for $79K. Our condo is worth $150K and we owe $320K, but we don’t know wether in California we are liable for that 2nd loan since it’s a home equity line? I don’t want to end up owing Bank of America $79K when I’m going to loose my property and ruin my credit. What should I do? I’m still current with payments but I’m struggling and I can’t do a loan modification I tried.
Answer: – I would keep trying to work with your bank on the loan modification. There are several attorney’s out there that “GUARANTEE” there work when modifying loans so you may want to check into that as well. It’s hard to believe sometimes, but they really do want you to stay, the challenge has always been jumping through all their hoops which an attorney can assist you with. Also you have a better chance since they know certain things to say that will increase your chances of a successful loan modification.
If a loan modification still doesn’t work, then you could try to do a short sale. Unfortunately with a short sale you would have to sell your home, but if you can’t make the mortgage, then you’re going to move anyway so might as well be a short sale then foreclosure on your credit. Regardless if you do a short sale or foreclosure, the bank still has the right to come after you for the deficient amount, but very rarely does this ever happen in California because of the laws there. And if you have an seasoned agent or investor working with you on the short sale, they can actually eliminate the possibility of a deficiency judgment altogether. So really all you have to be concerned with is a 1099 from the bank. They will write off the loan as a loss and 1099 you for the amount they lost. Whatever you do, don’t ever give up.
Hello-Hoping I can get some general ideas of which direction we should head from here. After almost one full year of dealing with our mortgage company, they have finally DENIED our modification due to ratio of mortgage to income. They have been horrid to try to work with! Anyhow, we became delinquent in our mortgage due to a cancer diagnosis, work hours lost, adjustable rate, etc. We really don’t know what we should do. We can afford the ridiculous adjustable rate, but are 9 months behind.
Option One: Do we double up on mortgage payments and nearly pay $30,000 in the next 9-10 months mostly going towards interest.
Option Two: Consult with an attorney?
Option Three: Consider bankruptcy-chapter 13-as we understand that this could lead to a judge modifying the loan.
Option Four: Look for another land contract home and do the foreclosure.
I know there is no concrete answer, but any knowledge about this would help.
Thanks!!
You can continue with a short sale. If you can secure a buyer, this process can give you up to 7-8 months. If denied, even better. Try another short sale. You can ask a distant relative or a friend to be your buyer. You need from them a pre-approval letter from a lender. It is easy to get. Short sale can buy you many months if done properly
Unfortunately, lenders will almost always deny a request for a modification at least once. They are so busy and inundated with requests, the squeaky wheels are the only ones who get any help.
If you can continue to afford your house payment and do not have any other judgments or outstanding debt, I would not consider Bankruptcy. A judge will not usually modify the loan (only the lender can do that), they will only assist you in becoming current on the past due balance via a payment plan in addition to your regular mortgage payment. You can check with a Bankruptcy attorney regarding your options.
Contact your lender to see if they will consider you for other workout options. Other than modifications, lenders offer a wide variety of assistance to catch-up a homeowner who wants to resume their monthly payments. The most common of these options include repayment plans, forbearance plans, Homesaver advance, and partial claims.
You are in a great position to be able to resolve this issue.You just need the information and patience to see it through.