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Hope I am not too late in responding to your post, first of all, I am sorry to hear that you are in this situation; I found myself in that same situation in 2004. It doesnt have to turn out to be a hopeless situation. I am not sure what bank or lender you are working with, but did you talk with the supervisor of deliquent accounts and explain the hardship that you were experiencing? To my knowledge, most if not all lenders, have a hardship program and they put your loan into forebarance for several years, where you are only paying off the interest during that time, and it allows you to keep your home. Most banks and lenders will not tell you about this program even if you are sharing your hardship with them, but once you ask, they will discuss that program with you. One of the down sides of it, your monthly payment rises slightly after the forebarance loan is up. Thats what happened with me. For several years, I only paid the interest on my loan so I could financially get caught up, and what that did, added several years to the length of my loan since I was not paying on the principal. Worked out, because I wasnt planning on moving and was able to save my home.
Do you have enough equity in your place to take out a second quick mortgage or refinance the loan with another lender? You can probably get an ARM alot easier and quicker, adjustable rate mortgage, through a second party lender, not a bank. But within 2 years, you need to quickly get out of the ARM as your monthly payments will rise each year, and you are basically just paying interest to the loan, no principal. I dont like to think of it as throwing money away, though that is exactly what you are doing.......... but you can also claim all that interest you pay on the ARM on your taxes, so your tax liability is very low or disappears during that time. The only good thing about an ARM in desperate times, it buys you time to repair your credit from the deliquencies, but at a higher cost. The rates are slightly higher, but they are eager to loan to at risk properties that have equity. They dont have anything to lose, only to gain, know what I mean? When I sold my property and went to purchase my next one, I also had to do an ARM to build my credit back, then went to Wells Fargo to refinance the ARM within two years. They *Wells Fargo Mortgage Company, not Wells Fargo the bank) were wonderul, didnt have to pay any points or closing costs, they added it in to the borrowed amount, and I was able to close in less than 30 days. I have been on my new property for the past 4 yrs.
I am sure that their is an attorney fee included in the amount that you will have to pay because the lender already contracted to retained them to proceed on the foreclosure, so they owe the lawyer money whether it continues or not. I also had to pay the attorney fees and there was absolutely no way around it. With pushing of the lawyer, you can get them to push the date back, but not for a prolonged time. I would call them everyday, several times a day to give them status of how much money I had and collected and how much longer I needed, day by day, and I guess they had sympathy for me and pushed the date back. Your situation needs immediate around the clock work to save your property. The amount that I had to come up with was just under $13,000, I begged and borrowed money from everyone to help me save my house, and by Gods grace, a little from here, a little from there and was able to get the exact amount needed and everyone was paid back overtime. To those who lended me the larger amounts, I commited my income tax returns to them with a ball park figure of my return based on the previous year return and they gladly helped me out. Again, see what you can do to delay the process and get into their hardship program, dont delay. By the way, couldnt DH have taken out a loan against his 401K to pay the debt vs cashing it out? In emergencies, I always use to borrow against my 401 and its interest free and the payments or return to the account were always minimal? Its like borrowing your own money. See if he can return the money and borrow against it. Try contacting you local legal aide society to get an attorney to help you. (if you are indigent, the services are free, good lawyers volunteer their time, its a requirement of the bar, or if you have income, they charge a fee on a sliding scale). Worse case scenerio, find a cash buyer and try to move it quickly. Once they foreclose, it takes forever to get any money owed you from the remaining proceeds, alls they care about is getting their hands on what is owed them. It definitely leaves one in between a rock and hard place for sure, especially with the times we are facing now. You will be in my prayers for sure. On a positive note, foreclosures, at least in Hawaii are not moving, and the banks are willing to work with people on saving their houses because they are sitting on alot of properties already, so for one to buy some added time looks hopeful.
