Moved over from Triforum, posted wrong last night. thanks who answered.
Lost my job, lack of work, RIF etc, No I am not an idiot who did the stupid things. 8yrs mortgage payment on time, with Citi Bank = $1.00 a share now… I am not going to be able to pay it, 30 yr fixed just at 5%. I am planning in 6 months if all hell breaks lose to get out and start over. Who has gone this route, and what were your experiences. I will call the bank and try to get some kind of program set up that will benefit us both if that’s even possible.
A few lines from Warren Zevon
I’m the innocent bystander
I’m the desperate man
Send lawyers, guns & money
The shit has hit the fan!!!
thanks all,
Job hunting is like Tri Training=Give it your all & best.
If you bought that far back, it would seem you could sell you house and come out ok. Yes?
My thoughts as well. Don’t destroy your credit and good name if you don’t have to. Depending where you live, it could impact your ability to rent or even get that next job.
Remember, bad credit is bad credit. doesn’t matter if it was a short sale or a foreclosure right now. My suggestion is to call Citi, they are actually on a very short leash for what they need to be doing right now since they partook of the TARP monies. Ask for a modification, you will probably not get a reduction in principal, but you will end up with a low rate and maybe a 40 year term. The Obamahood and his band of merry men have come up with a bailout designed especially for you. The details are here: http://www.financialstability.gov/
Do not pay someone to do this for you, take a little time and fill out all of the paperwork that Citi sends you, and understand that they are getting thousands of calls per day from folks in the same boat you are in.
It looks as though if you have a Freddie, Fannie, or govt insured loan (FHA, VA, etc) the bank will figure out what 38% of your income is and adjust the payment with term and interest rate to that point, and then the feds will adjust the payment down to 31% and compensate the lender for the difference. Now, not all circumstances will be able to take advantage of this, but it looks like a very viable program for many people.
the bank will figure out what 38% of your income is and adjust the payment with term and interest rate to that point
I can’t see how this will work since he is unemployed. I think when that happens you are screwed on this deal. Maybe getting a $7/hr job at McDs will qualify?
Here is my advice - try and sell it for what ever you can if you are not upside down.
if you are upside down, you can probably live in it for about a year before they will evict you. Just keep on telling them that you are going to make the payments. If you can not sell it and you have equity in the house, take out a home equity loan on the house before they evict you.
With 8 years of mortgage payment on time you should have a part of the loan balance paid off. On a 30 year loan that should be around 15% paid off after 8 years. You should have no problem selling that home without a short sale but then why would you do that? You have to live somewhere and unless you bought a $1M home it shouldn’t cost that much to pay that monthly living cost.
Sure, without income it could be difficult to make that payment if you don’t have any savings. I didn’t understand how Citi and its current $1 share price has anything to do with it. Unless you are actually holding that stock, but in that case you cannot say that you didn’t do stupid things. That stock was at $50 just two years ago and holding it all the way to $1 hardly qualifies as not stupid.
I’d apply for unemployment IMMEDIATELY. What state are you in? I’m asking because different States have different Foreclosure laws. California for example is a non-judicial foreclosure State. It takes a while until the lender begins the foreclosure process and records a Notice of default (NOD). Then there’s a 3months period until they can legally record a Notice of Sale (NTS) and from then on 21 days until they can foreclose through a non-judicial foreclosure sale by the Trustee. But it depends on your State.
How soon do you think you can get a job again? Walking away from a home that you purchased 8+ years ago with close to 15% paid off isn’t the right thing to do IMO. You need to live somewhere anyways. With that much equity you could always get a bridge loan (hard-money) at a higher interest rate. I’d make sure that the interest rate on such a loan would be fixed. Such a loan, even though at a high interest rate, could help you make up for the difference between mortgage payment and loss of income / unemployment payment. As soon as you get a job again you could try to refinance and consolidate that loan to get rid of that high interest payment OR just pay it off really fast if that is an option. Whatever makes more sense at that time.
If you truly didn’t do the “stupid things” there are plenty of options for you and you shouldn’t even be thinking about foreclosure. Why do you feel the need to “start over” through Foreclosure? If you feel like providing more info we could help some more. I’d also contact the lender ASAP and discuss your situation with them.
What was your debt to income (gross) ratio prior to losing your job?
If I were in your shoes, each day would focus on the following:
Get a job. I would go back to your previous employer and attempt to negotiate a 50% pay cut, something, anything. This should likely help you quite a bit in the re-working of your mortgage. It is my understanding you need to be employed, whether that means min-wage I don’t know. Just get a job.
Stay in close contact with what is going on with all of the bailout plans. Educate yourself on what you need to do.
Rent as much of your house as possible. Leave a room for you (and wife?) and one other room for up to four kids. The rest should get rented ASAP. Yeah it will suck, but offering discounted rent to help others while you create cash-flow will likely enable you to bide your time in order to actually get everything worked out with Citi and the Feds.
Don’t give up. Relentlessly pursue all avenues. I would highly suggest giving up triathlon until this gets worked out. Maybe still run, but you need to approach this as a double-time job. The ROI on your effort to fully understand what is out there, to pursue it, and to find some cash-flow will be the difference between financial ruin and a new mortgage in the same house.
If you sell anything, from renting housing space, to furniture, to triathlon goods, only accept cash. Don’t accept PayPay, checks, just the green. Keep it in a safe. You don’t want the bank or the Feds to say, “We will offer you this program, but we get all your assets”, or “You have too much cash to qualify”.
Tell your family how much you love them.
Go to church to be thankful for all the blessings you still have.
With all of that said, I am vehemently opposed to the bailouts; however, I would rather a STer get the money than someone on Tri-Newbies.
Thanks everybody, appreciate the ideas, I am just planning ahead, I would rather be prepared then not.
I have already done the following;
Signed up for Unemployment
Resume update and networking=actively seeking employment
Wall Street Journal article and web sites on Home mortgage bailout
Wife already came up with the idea to rent out 1-2 rooms
We are on the road to keeping it all and recovery, just needed a little support and ideas.
No credit card debt and all cash from now on if possible.
thanks again
Actually I have nothing constructive to add. However, if you’re actually considering foreclosure, then I have to disagree with your statement that you’re not ‘an idiot who did stupid things’.
Obviously, one of a couple things happened and ALL of them you had control over. You could have purchased a home with a smaller mortgage payment. You could have rented. You could have more than 6 months living expenses. Now that you’re in this situation you could take the advice of some of the other posters. Ultimately, though, you were a speculator. You THOUGHT it would be OK. It wasn’t. But I guess that’s not your fault.
Has anyone else noticed that it’s always someone else’s fault?
Citi announced a program last week under which they will reduce mortgage payments to $500 per month for 3 months if you lose your job. Definitely worth a look since it could save you some cash in the short run if you qualify. http://money.cnn.com/2009/03/03/real_estate/Citi_unemployed_homeowners/