[sluja]

I bought a home in 2003, got sick in 2005 had to refi, Wachovia. They made me put my aging parents on since my credit wasn't good at the time, well I also got a second from a different company. I am in a pick a payment paying only the minimum payment and the balance is going up, I owe more now than when I got the loan, $354,000 on the first $20,000 on the second, my house is worth $198,000, how can I get out of this, they will not modify the 1st because of my credit, I am behind on the second, what is the easiest way to save this house, I would have just walked away but I cannot ruin my parents, the second is only in my name but if I default I'm sure it will affect my parents. I cannot live like this anymore, can some one advise, what would happen if I file bk, my parents would be left to pay this mortgage they are retired and in their 70"s

[rockinmommy]

From your description, I don't see a lot of options. Especially not in regards to keeping your parents out of it. Unfortunately, the bank will go after anyone and everyone they believe they can get money from who is legally responsible for the loan.

I don't believe there's any way the lien holder for the 2nd mortgage can affect your parents in any way other than attaching a judgement to the property that would have to be paid (after the 1st mortgage is paid) at the time of a sale. So I'd let the 2nd go for now and concentrate on the first.

Unless some type of government relief passes really soon, or something of that nature, I think your best bet is to do whatever you can to keep up on the payments for the 1st mortgage and ride this out until property values go back up. Which they eventually will. Is it an adjustable mortgage that keeps going up? I guess I'm asking why could you afford it when you got it, but not now? Times are really tight, and if you're not already, it may be time to look at drastic measures like a 2nd job, etc. It sounds like that's what it's going to take to keep your parents out of it...

I'm almost certain that even if you file bankruptcy the lender can still come after the co-signers for payment. It might be worth a consultation with a bankruptcy atty. Around here they give free consultations.

[ScottGem]

You and thousands of others unfortunately. Too many people were suckered in by the real estate boom to finance their homes to the hilt in the expectation that values would rise.

The only thing I can suggest to you is that you make sure you pay more than the interest on the loans so you are at least paying down the prinicpal.

[MsMewiththat]

You need to level with your parents if you haven't already. That is a huge weight to carry on your own. There are other things that maybe able to be done to get you back on track. Have you spoken with a mortgage counselor or someone from your bank on what they recommend that you do?

[sluja]

The loan that I have is called pick a payment, which goes up $100 a year until it caps so the lowest payment I can only afford since it was cheaper when I got the loan, I will continue to make the payments the best I can so my parents will not suffer, I was not mentally well when I made this loan and didn't fully understand the full terms and my parents only did it to save the house and the broker didn't fully explain anything to them or me. I am just sick over this

[ScottGem]

You don't say what your living arrangement is. Is there any possibility you can take on a roommate? Or maybe you can rent the house and move in with your parents?

[sluja]

I am a single grandmother, I have a very small house that wouldn't rent for what my minimum payment is, my parents also have a very small house but that maybe an option down the road, nothing is impossible

[MsMewiththat]

When you say small, what do you mean? The mortgage is far from small @ over $350,000 I'm always so amazed at what is happening with the mortgage crisis, where were they when they were doing all of this lending. Good luck to you, remember that this will pass, you will get through this and you are going to be okay. Don't let this beat you up, you will need your energy and I hope you don't mind me saying this but PRAY!

[sluja]

My house is 964 square ft. appraised at $189,000 and I owe more than $354,000

[sluja]

when you say small, what do you mean? The mortgage is far from small @ over $350,000 I'm always so amazed at what is happening with the mortgage crisis, where were they when they were doing all of this lending. Good luck to you, remember that this will pass, you will get through this and you are going to be okay. Don't let this beat you up, you will need your energy and I hope you don't mind me saying this but PRAY!

Thank you, I pray every single night

[ScottGem]

my house is 964 square ft. appraised at $189,000 and i owe more than $354,000

How much was the original mortgage and the original second? What was the house apprasied for when you got the second?

[sluja]

I got the 1st in 2005 for $320,000 and the 2nd later that year for $20,000 the house appraised for $356,000

[MsMewiththat]

This is going to be a rude question, so forgive me in advance. What happened to the over 100,000? If you owe it it's because they gave it to you. Were you able to pay down some other debt, that's a lot of money to go through in less than 3 years

[sluja]

I have a pick a payment loan which I pay the lowest payment, called an negative am which causes my balance to go up, I don't have any extra money and haven't had any to pay off anything, just barely making it by the grace of god

[MsMewiththat]

okay, my bad, so your original loan was for $320,000 and now the due to the housing market the value is lower, I get it. I was thinking that the original mortgage amount was in the $190,000's. Sorry for the confusion. I totally understand and I really wish you well, have you spoken with your parents? Do they understand what you are going through? I know there isn't much to do, because you can't sell the house for what you owe. It's the most common problem in the country at this point. Wasn't there a program reently set up to help homeowners get in a new mortgage? Have you checked any of the counseling programs through fannie may or freddie mac?

[froggy7]

Ahh... the dangers of negative amortization! Just as info for people reading this thread, there are loans out there that let you pick one of three payments: interest and principal, interest only, or an even smaller amount. If you pick the last option, then any interest that isn't paid gets added to the loan amount, and you get charged interest on it. That's negative amortization, and it means that the loan quickly grows to more than it was to start with. I have no idea why those loans are legal.

If all you can afford to make is the smallest payment, then you seriously need to consider financial counseling and possibly bankruptcy, because all you are doing is creating an even bigger debt for yourself.

[sluja]

My parents don't understand the scope of it, I will find a way to solve this one way or another if I can prove predatory lending which I think I can, they'll have to fix the loan. It's just going to take some time and effort, that's why I am sharing my story, in hopes I'll find some information to help me and others

My parents don't understand the scope of it, I will find a way to solve this one way or another if I can prove predatory lending which I think I can, they'll have to fix the loan. It's just going to take some time and effort, that's why I am sharing my story, in hopes I'll find some information to help me and others , the government program that will be signed into law 10-1-2008 will not help a lot of people, the lenders are not forced to put struggling homeowners into affordable loans it's up to them, voluntary.. and there's a lot of requirements 9 to be exact and one is no second mortgages, no second lines of equity, that will leave a lot of people out right there.

[MsMewiththat]

I am so sorry and I will pray for resolution for you. I know that you are stressing over this. You have to take it in stride. Don't make yourself sick over it. Can you parents help with the monthly payments until you are able to maybe either get more income or pick up a second job?

[ScottGem]

if I can prove predatory lending which I think I can, they'll have to fix the loan.

That's basically what I was thinking when I asked what the original mortgage and appraisal were. That's definitely an angle you should pursue.

[sluja]

I am looking, maybe a promotion, yes I'm looking to supplement my income soon, maybe rent a room to my daughter. Hopefully, it won't cost me more than what she pays me, thanks for the prayers, only he can make the difference