Financial ruin = nervous breakdown

[punkin]

My family owns a real estate firm and let me tell you that during the "bubble", there were PLENTY of people buying houses that they couldn't afford. Why do you think there are such tough restrictions now on mortgages and thousands of mortgage brokers went to jail for mortgage fraud. Heck, the FBI opened up a branch in miami JUST to deal with all of the mortgage fraud. A personal friend of mine was making $5/hr as a delivery driver at a restaurant, yes $5/hr + tips and bought a $250k house... his thought process "oh it will keep going up in value, I'll refinance and cash out". Not saying that this was EVERYONE, but to say that banks "forced" people into loans is absurd. If I make $30,000/month and you try to sell me a house for $28,000/month, common sense tells me that I can't afford that home.

Not to stir the pot, as I do feel bad for the OP. At this point, go for a short sale. You do need to get a real estate agent who is familiar with short sales and works with an attorney to facilitate it properly. Some banks DO require you to pay the deficiency.

She can't do a short sale right now because the bank won't agree to it. She needs to listen to her attorney (and pretty much everyone on this thread) and stop paying. That will free up income to pay for her other expenses and force the bank to actually co-operate with her. Bankruptcy (if it comes to that) is not the end of the world. Making yourself sick very well may be.

 

[Candlz]

Punkin - you are right.

The most important thing is - do what you need to do to put this behind you. Make sure that your lawyer is capable of navigating this on your behalf and - when it is all set and done (and this is the truly important part) DO NOT get back into this position again.

You are young and have a brilliant future ahead of you. No matter how it feels at the moment - your attitude will dictate your results. You have tried to do the right thing - they won't work with you - BLESS AND RELEASE but LEARN so you don't repeat.

Let your attorney do the legal stuff - you sure are paying them enough.

 

[sukhakuli]

I know you had a bad experience with renters, but I'd try that again. One bad apple shouldn't ruin the bunch; most renters are decent people who just need a place to live, too. We had to move for my dh's job, and our home decreased on value by over 100,000. I think at the lowest it was 150,000 lower than what we paid for it. It's coming back up now, so it's value is about 100,000 less than what we paid for it. We put in a large downpayment (which I will never do again, lol), so we're "even" right now with the loan.

Anyway, we hired a property management company to deal with the renters. They don't get paid unless it is rented, and the amount they get paid goes up if it is rented for a higher price. They take 8% of the rent, and handle all repairs and so on. There are costs, they have been having trouble with the A/C, so I have spent about 1500 trying to get that fixed, but the rental income covers the mortgage 100%. The company drives by the property every month, and then walks through every 6 months, per the agreement with the tenants.

You can't refinance if you are underwater. We looked in to that and they said NO, lol. There's really very few options with the banks. I think they want you to foreclose because then they get the money you paid them all that time for the mortgage and they get the house. It's a pretty sweet deal for them.

The value will come back up, it will just take time. I'm sorry you are struggling.

 

[Lisa loves Pooh]

I agree about seeing a counselor.

There are different kinds of people who do short sales and foreclosures: hose who choose it for no reason and those who need to.

There is no shame in throwing in the towel after you have done all you can.

Financial ruin is Enron. You are not in ruin. You have hit a bad spot and you will recover! There is life after bankruptcy.

 

[happygirl]

My ownly advice is trying bankruptcy, Sending up prayers for you

 

[timmac]

Sounds like it's time to take a huge step back, take stock of what's really important, and prioritize. First, make sure that you're paying for the roof that is over your head right now, your ability to get to work, keep the lights on, and have food in the fridge to eat for dinner. (Not lavish living, but meeting basic needs, of course) Whatever money is left after that is what you have available to work with towards your old house. Call the bank and explaint the situation, see what options (if any) they offer. If there's nothing that can be done, then it is what it is, and it'll get foreclosed on, or you'll have to file bankruptcy, or something along those lines. In the grand scheme of things, that is really not that important considering you've got a place to live and food to eat... could be a lot worse. No sense jeopardizing that in addition to the extreme stress you're going through.

I don't agree with any PPs who have talked about your credit rating as an important issue in this situation. The (sad) reality is that's probably going to take a hit, probably a pretty big one. But again, take a step back and realize there's more important things at stake. If you end up hospitalized over stress, or losing your current residence, or going hungry, then a good credit rating isn't going to mean a thing.

 

[BellePrincessBelle]

Belle - I am sorry - this statement is just wrong. The 'people bought houses they couldn't afford' is a load of junk. If you doubt it than walk into a car dealership and try to get a load for a car that is way out of your price range. They won't approve you for the loan. The banks went after as many people as they could and talked them into these loans that they (the banks) knew full well were garbage. I remember getting call after call after call from companies offering to refinance us at less that 1% interest. We were lucky - not smart - but lucky because we didn't fall for it. I remember the temptation so well though.

Rafiki31 - please just make sure your attorney insures you will not be held liable for the loan if you lose the house (or the difference in the short sale price). And - since you have an attorney - advise the bank to speak only to him (or her) you pay them to deal with the stress. Tell the attorney your goal. Be it short sale, refinance, or whatever. Then - when the bank decides to offer the short sale number, your attorney will be able to work out the details. It will be FAR more expensive in the long run to do this without an attorney.

I disagree with you 100%. If you make $8 an hour at Starbucks you should know full well that you CAN NOT afford a 200k plus house no matter what a bank/ mortgage company says. Yet people did exactly that.

 

[Juliet25]

I'm so sorry. If you honestly feel you've done all you can do, just let it go. It's not worth the stress. A lot of people are in your situation. Hope it works out OK for you.

 

[Candlz]

If you make $8 an hour at Starbucks you should know full well that you CAN NOT afford a 200k plus house no matter what a bank/ mortgage company says. Yet people did exactly that.

If the banks approved loans for people who did not have the income to cover them, then it was the bank who was irresponsible in making these loans. The banks have a responsibility to the global economy and they destroyed it - among many other things. The banks are being investigated by all 50 states and are settling for billions of dollars because of their actions.

The banks are just to big.

If I lend someone money, with the knowledge they can't pay me back - then I was irresponsible...

 

[DISNEYSIX]

I see this all day long being a mortgage originator. Sounds like you are in financial trouble and don't have a lot of assets so go ahead and file a Chapter 7 Bankruptcy and include the home. After 3 years from the discharge date, you will be able to quaify for a FHA mortgage with 3.5% down. Be sure to pay your rent with checks and go open up a couple of secured credit cards and don't be late on anything. However, if you do have assets and can't file a BK7 and this is not your primary residence, then the bank can come after your assets.

 

[mafibisha]

There comes a time when you have to put your health first and your credit 2nd. You have reached that point.
My husband (of 21 years) and I purchased our first ever home in 2007, just months before the market hit the skids. This home was perfect for us. We bought the right amount of home for our income, but you can never see what the future will bring. A month after our first payment, my husband was severely injured on the job and was on worker's comp for 2 months. Having just purchased our home, our savings was depleted so we fell behind, but got it worked out. Then, 6 months after getting past the bump, his company went out of business, literally overnight, so...full paycheck to unemployment for 3 months...guess what happened...behind again, through no fault of our own. We had worked out a repayment arrangement with our mortgage company (in writing and everything) then our mortgage company was purchased my the big JP Morgan chase..they refused to honor our standing agreement with the previous company, even though we had been upholding our part of the agreement, and began foreclosure proceedings immediately. They gave us 15 days to come up with the 3 late payments, 2 on time payments and all of their lawyers and filing fees!!! Even with our re-established savings we were only half way there. I was on the edge of a true breakdown when my husband and I decided it was better to walk away and save our health, our sanity, and our marriage.
You have reached a point where you must realize that your credit can handle the hit it will take, but not your health. Yes, our homes tend to become extensions of ourselves that we invest so much in, but please remember....a house can be replaced...you can not.......
Good luck with your choices,,

Wow, so sorry to hear how awful Chase treated you. Is that common among banks, or just Chase? Best wishes, hope you're doing okay now.

OP, I don't have any advice that hasn't been said already, but will say a prayer for you. Hang in there and don't let your health suffer. As they say, if you have your health, you have everything.

 

[Scrap4me]

Wow, so sorry to hear how awful Chase treated you. Is that common among banks, or just Chase? Best wishes, hope you're doing okay now.

Unfortunately what happened to us is pretty much standard practice. It turns out that when a company purchases your mortgage they only have to standby the original terms of your mortgage or any subsequent modifications that are made. Since our agreement was only a repayment of past due amounts, it was not considered a modification. We have a great friend that was a bank v.p. for 20 years who helped us through our tough decision to let the house go. We were fortunate that the house sold at the foreclosure auction for more than we had originally given for it ($10,000 above price) so we were not left with a deficiency owed.
We are now doing well,,currently renting and will continue to do so until the economy begins to recover.

To the OP, please let us know what your outcome is. Protect your health and your current living situation as those are your primary concerns. Your credit will recover over time...

 

[usnuzuloose]

I wont tell you what to do, but I can say that if you stop the payments you can then proceed with a short sale. You submit the paper work to the bank letting them know why you can no longer afford it. It came on our credit but it wasnt that bad. Because in ca you can repurchase after 3 yrs. That is where we are at. We have been approved. So dont panic look at the option for a short sale. That way the bank has the say so of what they want and you dont put out any money. Please dont stress so many of us have been where you are. worrying wont change anything. I will keep you in my prayers. Ours sold in 3 months and that was before the bank gave an ok. Here is a big

 

[Hannathy]

I disagree with you 100%. If you make $8 an hour at Starbucks you should know full well that you CAN NOT afford a 200k plus house no matter what a bank/ mortgage company says. Yet people did exactly that.

I agree with this.

I don't care what the bank tells you, you were given a brain for a reason, use it.

25 years ago banks told you you could afford more than you really could also but people tended to use their brains more and weren't greedy about getting into houses they truly couldn't afford. We were told we were crazy for not buying more, but we stuck with what we could afford assuming there would be bumps in the road. Very few did this recently.

Buying a house is a gamble and many people gambled at stakes they truly couldn't afford and now that they lost want sympathy BUT when they were making exorbitant gains on these houses then it was great and look how smart we are, you are dumb for not getting into the game.

Sorry sometimes you loose when you gamble. Everyone else shouldn't have to pay for you playing.

 

[Candlz]

So you are saying that you truly believe that this entire mess was created by those Subway workers being approved for loans beyond their means?

 

[punkin]

I agree with this.

I don't care what the bank tells you, you were given a brain for a reason, use it.

25 years ago banks told you you could afford more than you really could also but people tended to use their brains more and weren't greedy about getting into houses they truly couldn't afford. We were told we were crazy for not buying more, but we stuck with what we could afford assuming there would be bumps in the road. Very few did this recently.

Buying a house is a gamble and many people gambled at stakes they truly couldn't afford and now that they lost want sympathy BUT when they were making exorbitant gains on these houses then it was great and look how smart we are, you are dumb for not getting into the game.

Sorry sometimes you loose when you gamble. Everyone else shouldn't have to pay for you playing.

It doesn't sound like this was the OP's problem. Her problem was an unexpected layoff and forced move followed by 2 years of paying for two residences. Very few of us could have predicted (or afforded) that, so please get off your high horse.

 

[PrincessSuzanne]

So you are saying that you truly believe that this entire mess was created by those Subway workers being approved for loans beyond their means?

Some of the problem is because of people that chose homes they truly couldn't afford. If you even barely listen to the news, which I am guilty of, you would know that. I have seen many news stories on this very subject. ABC has done several specials on the subject.

I don't believe that is what the OP did, but many people did.


Suzanne

 

[Candlz]

It doesn't sound like this was the OP's problem. Her problem was an unexpected layoff and forced move followed by 2 years of paying for two residences.

You NAILED it! That is what has caused the MAJORITY of the issue. Not all, because yes, some people did overextend themselves (which the help of the financial institution that allowed them to do it)


The people who believe 'people bought more house than they can afford' will continue to believe that. It is simply easier to process.

OP - I would like to apologize - I didn't not mean to turn your thread into a debate. The fact is there are many (millions in fact) GOOD, hard working, honest people in this country who have found themselves exactly where you are. You will recover and be better for it.

 

[eliza61]

So you are saying that you truly believe that this entire mess was created by those Subway workers being approved for loans beyond their means?

Of course they do. No one is ever going to hold the ceo's of banks and financial institutions accountable for the "made" up derivatives and ponzi schemes. Its so much easier to believe that Lehman brothers went out of business because a janitor brought a million dollar house.
This way they can pat themselves on the back and tell you how they brought a 100 square foot house.

 

[Candlz]

Some of the problem is because of people that chose homes they truly couldn't afford. If you even barely listen to the news, which I am guilty of, you would know that. I have seen many news stories on this very subject. ABC has done several specials on the subject.

I don't believe that is what the OP did, but many people did.


Suzanne

I do listen to the news - though for this topic, I am sadly forced to rely on the written because so few of the TV news stations report the full stories (on anything)

There is a reason "predatory lending' is a crime.