I purchased a townhouse in 2001 for $115,000. Later in that same year, I lost my job due to a merger. I refinanced in 2004 and the mortgage was then taken over by Homecomings Financial and now I have one of those sub-prime loans you hear about these days. At one point the lender began foreclosure but I was able to hold'em off by paying them $1,500 a month for 3 consecutive months and I'm not sure how those payments were allocated (some to the foreclosure law firm, etc.). When I refinanced my mortgage the balance was $135,000 at 8.75% ARM. Now after a loan modification involving more payments, my mortgage has a balance of $141,000 at 10% ARM with a monthly payment of $1,380. I'm now back with my old firm making better money than I did before the merger (which didn't pan out so well), but the lean times have left me with this upside down mortgage, a payment I really can't afford and poor credit. Since my credit is already affected, would you recommend I walk away from the property and rent somewhere more affordable?

First you don't just "walk away" exp from Homecommings. After they sell your home for a lot less than its actual value, they will come after you like you won't believe for the balance, so you will still be paying and not even have the house.

Ok, so if the house was worth 200,000 you would not have a issue about keeping it? Just because it is temp down, now you want to get rid of it,

First are you working now, I will assume over 5 years you are working at some new job. But you hang on to the property and it will in a few years go back up in value and be a very good investment, or of course you can try and sell.

Homecommings will do some short sales, but I will be honest they are very hard to deal with, they take a couple weeks to get back to you about a OK on a short sale, and turn a lot of them down.

Also Homecommings have their own speical collection people who are not past "pushing the truth to the limit"
Their customer service once the payment goes into defult is beyond bad, no matter what you call asking about, they forward your call to their collections people, not their loss migration department and don't tell you that they are not the loss migration people.

I believe I would go homeless before I would borrow money from that company. *** this is from personal experience and experience as a real estate agent trying to deal with that company. Average hold time getting to talk to someone was 20 to 30 minutes after you are in defult more than a few months.

So have you tried to sell the house

First you don't just "walk away" exp from Homecommings. After they sell your home for alot less than its actual value, they will come after you like you won't believe for the balance, so you will still be paying and not even have the house.

Ok, so if the house was worth 200,000 you would not have a issue about keeping it ?? just because it is temp down, now you want to get rid of it,

First are you working now, I will assume over 5 years you are working at some new job. But you hang on to the property and it will in a few years go back up in value and be a very good investment, or of course you can try and sell.

Homecommings will do some short sales, but I will be honest they are very hard to deal with, they take a couple weeks to get back to you about a ok on a short sale, and turn alot of them down.

Also Homecommings have thier own speical collection people who are not past "pushing the truth to the limit"
Their customer service once the payment goes into defult is beyond bad, no matter what you call asking about, they forward your call to thier collections people, not thier loss migration department and don't tell you that they are not the loss migration people.

I believe I would go homeless before I would borrow money from that company. *** this is from personal experience and experience as a real estate agent trying to deal with that company. Average hold time getting to talk to someone was 20 to 30 minutes after you are in defult more than a few months.

So have you tried to sell the house
You are right, Homecomings is a beast to deal with so I think I will be better off by keeping making my payments and staying put. Who knows, maybe Obama will bail me out and offer me a new loan 5-6% 30 year fixed (like that's going to happen!) Thanks for your advice!

If your job status is good, I would continually search for a refi from another firm. Maybe every 6 months or so. Of course your problem is the upside down nature of what you owe. But if you can get a refi in the 5-^% fixed range, you will be better off.

If your job status is good, I would continually search for a refi from another firm. Maybe every 6 months or so. Of course your problem is the upside down nature of what you owe. But if you can get a refi in the 5-^% fixed range, you will be better off.

Thanks for your advice. Job is good so I'll just ride it out!