GMAC loan workout

[djrobsd]

Ok, so I’ve kinda shared bits and pieces of my story to people on this board, but I thought I’d share the latest in my battle of trying to do anything but throw in the keys….

I contacted GMAC mortgage last week to see if they had any sort of program like Countrywide does to modify the loan to help borrowers keep their homes and avoid foreclosure. My ARM had adjusted from 5.875 to 8.875 last month, and will adjust again probably another half a point in March, depending on where the LIBOR stands at the time.

I spent over an hour on the phone, spoke to 3 different people, and told my entire store to 2 of the 3 people. The 3rd person I talked to was in the “loss mitigation” department, and he tried to convince me that i need to borrow money from friends/family, get a cash advance, get a 2nd job, etc. The usual tactics that collection agents play… After explaining to him that I’ve exhausted all my options including trying to sell the home, and that property values in San Diego are dropping 10% or more, he agreed to send my case over to their loan workout specialist. He said they would contact me within 7 days and gave me a number to call if they didn’t.

Of course, they didn’t call me back, so I called them today. Mysteriously, the lady acted like the guy I spoke with didn’t exist, and that there was no records in her computer of my conversation with him. She then started getting huffy and saying “So what do you want me to do about this?” And I said “Well, I guess if you can’t find it in your computer, then tell me what I need to do to talk to your loan workout specialists to try and modify this loan”.. So then she told me I would need to fill out all this paperwork and fax it back to them… So here it is folks, the GMAC “Package”:

-A cover letter saying “we’re here to help, we’re concerned, blah blah blah”

-4 page worksheet that the borrowoer must fill out

Here’s the worksheet:

Please tell us about your assets and investments:
Checking Balance:
Savings/Money:
Market/CDs:
Stocks/Bonds:
Vested Retirement Balanace:
Other Real Estate Equity:
Other:
Total Assets and Investments:

Total Monthly Net Income (INC$) – Total Monthly Expenses (EXP$) – Monthly Gain/Loss (G/L) –
Income$
Expenses$
Gain/Loss$

Note: If your expenses exceed your income, there may still be hope. Homecomings has

partnered with non profit credit counseling agencies to provide you with ideas related to

personal finance management

** Please indicate an amount for a down payment to reduce your delinquent Balance:
$$$_________

**WHen would these funds be available?

1. What Event has caused your financial hardship (if necessary please attach an additional

sheet)?

2. What was the term of your hardship (when did it begin? Has it ended?)

3. What was the financial impact of your hardship (estimated expense of hardship, income

lost during hardship, etc)?

4. Are you currently employed? Yes/No If you answered yes, how long have you been with your

current employer? Are there any forseeable changes in your employment?

5. How long have you lived at the property? Have you considered selling the property? If

so, please describe why you would want to sell your home. If not, please describe why you

want to keep the property.

6. What actions have you taken thus far to resolve your financial situation (Eg obtained

additional employment, reduced optional monthly household expenses such as cable & Internet

service, etc)

Next page:

In order for us to better understand your circumstances and tailor a CUSTOM solution to meet

your needs, we require information related to your monthly income and expenses. If there

are additional contributors to your household income OR if additional parties are

financially responsible for this debt please include this information below as well.

Please tell us about your monthly household income:

NET INCOME (monthly after taxes and benefits):
Disability:
Rental Income:
Unemployment:
Child Support/Alimony:
Other:
TOTAL NET MONTHLY:

Current Employment Status:

Please tell us about your monthly household expenses

This Mortgage:
Other Mortgages:
Auto Loan Payments:
Auto Expoenses:
Credit Cards/Loan Payment:
Insurance/Medical Exp:
Child Care:
Child Support/Alimony:
Total Utilities:
Groceries/Household supplies:
Spending Money/Charitable contributions
Property Taxes (if not in mortgage)
Insurance (if not in mortgage)

There is also a sidebar:
# autos
estimated balance
maintenance cost
fuel cost
number of credit cards
total balance
life: med: auto: costs

Utilities sidebar:
Water
Gas
Elec
Cable
Cell Phone
Phone
Sewer
Internet

Total Monthly Expenses:

And last but not least, the property worksheet:

Name
Work Phone
Home
Cell
Best time to call

Please check all that apply
( ) I Live in this House
( ) This House is vacant
( ) THis is a second home
( ) This is a rental Property (Monthly rent: _____)

Do you have other loans on this property? YES/NO

Lender
Principal Balance
Monthly Payment Amount
# of Delinquent Payments

Please check all that apply:

( ) This property is for sale (Agent name, phone # and listing price)
( ) I Am considering selling the property (Est value$ _____)
( ) I Am willing to do whatever is necessary to retain ownership of the home
( ) I Need help organizing my finances
TAXES:
( ) I pay my own taxes
( ) Taxes are current: YES/NO
( ) Taxes are included in the mortgage pmt

HOA:
My property has an HOA: YES/NO
Annual HOA Dues are: ___
Are HOA dues current? YES/NO

And of course, they want paycheck stubs, and bank statements…

[nostradamus]

Thanks for posting that, it's very interesting. All the questions on the bank's form are basic questions you should have asked yourself before getting into this loan… Just curious, how would you answer question 1?

What Event has caused your financial hardship (if necessary please attach an additional sheet)?

In other words, what has changed in your financial situation between now and the time you signed the loan docs?

[djrobsd]

My payment has gone up on my 2nd mortgage $300 and now the first mortgage w/ GMAC has gone up $610, my credit card debts have also substantially increased making repairs and improvements to the property, when I purchased the property my credit card payments were $0, and now they are $450 a month! My income has not kept pace with the increased payments.

One could say I don’t know how to manage my money, and I’m sure there are plenty of you who will jump on that, but the truth is at least 75% of that credit card debt was used to improve or repair the property, including a $5000 plumbing disaster that occurred earlier this year.

[nostradamus]

How old are you? If you’re in your 20’s I’d say this is a good learning experience which hopefully you can recover from in a decade or so, hang in there.

Part of the housing bubble is defined by the fact that income has not kept pace with housing.

How much, if any, equity do you have in the home? The way I see it, your choices are (in order of my own preference):

1. walk away and let it foreclose. this is assuming you don’t have much equity. you will take a hit on your credit report but in the future many companies who review your credit may be very forgiving to people in your situation if you had otherwise good credit except for this foreclosure thing. you may have to pay “forgiven debt” tax but there are talks of repealing this tax law as well, maybe in January.
2. refinance into a fixed-rate loan. You can do better than 8.75% (assuming good credit).

That’s about all I can think of for your choices… Now grab some lube and prepare to be reamed by other posters.

[nostradamus]

How old are you? If you’re in your 20’s I’d say this is a good learning experience which hopefully you can recover from in a decade or so, hang in there.

Part of the housing bubble is defined by the fact that income has not kept pace with housing.

How much, if any, equity do you have in the home? The way I see it, your choices are (in order of my own preference):

1. walk away and let it foreclose. this is assuming you don’t have much equity. you will take a hit on your credit report but in the future many companies who review your credit may be very forgiving to people in your situation if you had otherwise good credit except for this foreclosure thing. you may have to pay “forgiven debt” tax but there are talks of repealing this tax law as well, maybe in January.
2. refinance into a fixed-rate loan. You can do better than 8.75% (assuming good credit).

That’s about all I can think of for your choices… Now grab some lube and prepare to be reamed by other posters.

[nostradamus]

How old are you? If you’re in your 20’s I’d say this is a good learning experience which hopefully you can recover from in a decade or so, hang in there.

Part of the housing bubble is defined by the fact that income has not kept pace with housing.

How much, if any, equity do you have in the home? The way I see it, your choices are (in order of my own preference):

1. walk away and let it foreclose. this is assuming you don’t have much equity. you will take a hit on your credit report but in the future many companies who review your credit may be very forgiving to people in your situation if you had otherwise good credit except for this foreclosure thing. you may have to pay “forgiven debt” tax but there are talks of repealing this tax law as well, maybe in January.
2. refinance into a fixed-rate loan. You can do better than 8.75% (assuming good credit).

That’s about all I can think of for your choices… Now grab some lube and prepare to be reamed by other posters.

[nostradamus]

How old are you? If you’re in your 20’s I’d say this is a good learning experience which hopefully you can recover from in a decade or so, hang in there.

Part of the housing bubble is defined by the fact that income has not kept pace with housing.

How much, if any, equity do you have in the home? The way I see it, your choices are (in order of my own preference):

1. walk away and let it foreclose. this is assuming you don’t have much equity. you will take a hit on your credit report but in the future many companies who review your credit may be very forgiving to people in your situation if you had otherwise good credit except for this foreclosure thing. you may have to pay “forgiven debt” tax but there are talks of repealing this tax law as well, maybe in January.
2. refinance into a fixed-rate loan. You can do better than 8.75% (assuming good credit).

That’s about all I can think of for your choices… Now grab some lube and prepare to be reamed by other posters.

[betting on fall]

I too thank you for the post, and I hope you keep us updated.

But. . . . to begin the “jumping all over,” I don’t think you really answered the question about what unexpected events happened since you took out the loan.
Your loan went up, just as it was supposed to. You fixed up the house, which should have been expected if the house needed it. You mention the $5000 plumbing problem. I have some sympathy there, but occassional costly problems are an expected part of homeownership.

If nothing has changed with regard to your income, do you really expect GMAC to re-write your agreement?

[patientlywaiting]

djrobsd, are you the same person that said to accept the fact that people just want to own no matter what (perhaps for “peace of mind” and decoration purposes and not throw away rent)? What planet are you on?!

Are you also the same person who is bragging about 18% up on his 401k?

Why would the bank give you any slack? You need to cash out your 401k before they consider any help. Otherwise, they’ll see you in foreclosure. How are you funding your 401k when your expenses exceed your income?

[snail]

Yes, you need to cash out your 401K and hide the money under your mattress. So you could claimed that all avenues already exhausted. Good luck, however I would think the best way is just turn the key back. It sound to me that house required a lot of fixing, just my 2 ct.

[snail]

Yes, you need to cash out your 401K and hide the money under your mattress. So you could claimed that all avenues already exhausted. Good luck, however I would think the best way is just turn the key back. It sound to me that house required a lot of fixing, just my 2 ct.

[snail]

Yes, you need to cash out your 401K and hide the money under your mattress. So you could claimed that all avenues already exhausted. Good luck, however I would think the best way is just turn the key back. It sound to me that house required a lot of fixing, just my 2 ct.

[snail]

Yes, you need to cash out your 401K and hide the money under your mattress. So you could claimed that all avenues already exhausted. Good luck, however I would think the best way is just turn the key back. It sound to me that house required a lot of fixing, just my 2 ct.

[Arty]

djrobsd, are you the same person that said to accept the fact that people just want to own no matter what (perhaps for “peace of mind” and decoration purposes and not throw away rent)? What planet are you on?!

I guess he still didn’t realize he is a slave to his house payment. Of course, it is his money and his life. And since is also his problem, I don’t see why bank have to cut him any slack.

[Arty]

djrobsd, are you the same person that said to accept the fact that people just want to own no matter what (perhaps for “peace of mind” and decoration purposes and not throw away rent)? What planet are you on?!

I guess he still didn’t realize he is a slave to his house payment. Of course, it is his money and his life. And since is also his problem, I don’t see why bank have to cut him any slack.

[Arty]

djrobsd, are you the same person that said to accept the fact that people just want to own no matter what (perhaps for “peace of mind” and decoration purposes and not throw away rent)? What planet are you on?!

I guess he still didn’t realize he is a slave to his house payment. Of course, it is his money and his life. And since is also his problem, I don’t see why bank have to cut him any slack.

[Arty]

djrobsd, are you the same person that said to accept the fact that people just want to own no matter what (perhaps for “peace of mind” and decoration purposes and not throw away rent)? What planet are you on?!

I guess he still didn’t realize he is a slave to his house payment. Of course, it is his money and his life. And since is also his problem, I don’t see why bank have to cut him any slack.

[djrobsd]

For the record “Cashing out a 401k” is not an option the IRS affords us here in America. There are severe penalties for doing so, and you see pennies on the dollar when it’s all said and done. Also for the record, I haven’t put any money into my 401k since I bought the house, I shifted all my investment dollars into the house which was obviously a bad investment, and an important lesson has been learned here. Even if I did cash out my 401k, that would only delay the pain another 3-6 months, and wouldn’t make that much difference at the end of the day.

A home is a HOME not an INVESTMENT. The mistake I made was I got caught into the buy now mentality that millions of other Americans got caught into back in 2004 when the real estate market was sky rocketing, and even though I was perfectly content in my $1500 a month luxury apartment with a pool, jacuzzi, work out room, and all the amenities, I couldn’t resist the evil temptation of “Sweet equity”. Had I thought of it apples to apples between the apartment and the house I bought, I would have taken the apartment any day of the week both for lack of having to do any maintenance and for all the on-site amenities that a gated new apartment community affords. And my loan officer and my realtor were coaching me all the way along making statements like “I know this payment will adjust in 3 years, but the market is so hot you’ll be able to sell or refinance before then”… Yep, we’ve heard all this before.

I made the mistake, and so now I have to live with it. Can you blame me for at least trying to work with my lender and trying to keep the house instead of just walking away from it and making it someone else’s problem? I’m trying to do other people who are also struggling a favor and sharing my experience with them so they know what they’re up against if they decide to try to do the same thing. I didn’t have to spend my time posting on here but I did so as a service to others. Sometimes I wonder if all you folks on here that say throw in the keys are the same ones that go buy these properties at real estate auctions!

[bsrsharma]

trying to keep the house instead of just walking away from it and making it someone else's problem?

djrobsd – one thing I strongly suggest is please don't cast this in a morality play mold. This is a financial crisis and you should try to do what makes best sense for you financially. If the best financial decision for you is to walk away, you should do it rather than suffer involuntary servitude for the next 30 years.

[NotCranky]

djrobsd,

You are putting a very personal isue out on a “free for all” blog. You would never walk into a coffee shop or other location where a bunch of strangers are gathered and do that. You are going get what you get. If we want to play here,especially putting our personal issues or strong opinions out there, we can’t hardly complain about what we get. I do hope you get some good breaks going forward. I am not going to say bail or stay. It is great that you are trying ot tackle the issue from all angles. I agree with bsrharma on the moral issue. Don’t let it become a pack of demons in your head forever what ever you do. You will have bigger problems than losing a house if you do.

Best wishes

[patientlywaiting]

djrobsd, thanks for sharing your experience. I think that the hardship package that you have to submit clearly indicates that lenders don’t roll-over and will not agree to loan modifications until owners are at their last penny.

The only reason I gave you a hard time is that although you arguably are a victim of real estate, you continue to evangelize on the “benefits” of owning.

Didn’t you learn anything from your experience? Buying is bad for people who can’t afford it. They may wish to own but they should not until they build a financial cushion and the financial discipline to buy a house.

I know a woman who just lost $100k on an investment house. She still thinks that prices will go up next year and pay her back on her current residence. She has another hard lesson to learn. I expect to eventually see her in foreclosure.

[patientlywaiting]

djrobsd, thanks for sharing your experience. I think that the hardship package that you have to submit clearly indicates that lenders don’t roll-over and will not agree to loan modifications until owners are at their last penny.

The only reason I gave you a hard time is that although you arguably are a victim of real estate, you continue to evangelize on the “benefits” of owning.

Didn’t you learn anything from your experience? Buying is bad for people who can’t afford it. They may wish to own but they should not until they build a financial cushion and the financial discipline to buy a house.

I know a woman who just lost $100k on an investment house. She still thinks that prices will go up next year and pay her back on her current residence. She has another hard lesson to learn. I expect to eventually see her in foreclosure.

[patientlywaiting]

djrobsd, thanks for sharing your experience. I think that the hardship package that you have to submit clearly indicates that lenders don’t roll-over and will not agree to loan modifications until owners are at their last penny.

The only reason I gave you a hard time is that although you arguably are a victim of real estate, you continue to evangelize on the “benefits” of owning.

Didn’t you learn anything from your experience? Buying is bad for people who can’t afford it. They may wish to own but they should not until they build a financial cushion and the financial discipline to buy a house.

I know a woman who just lost $100k on an investment house. She still thinks that prices will go up next year and pay her back on her current residence. She has another hard lesson to learn. I expect to eventually see her in foreclosure.

[patientlywaiting]

djrobsd, thanks for sharing your experience. I think that the hardship package that you have to submit clearly indicates that lenders don’t roll-over and will not agree to loan modifications until owners are at their last penny.

The only reason I gave you a hard time is that although you arguably are a victim of real estate, you continue to evangelize on the “benefits” of owning.

Didn’t you learn anything from your experience? Buying is bad for people who can’t afford it. They may wish to own but they should not until they build a financial cushion and the financial discipline to buy a house.

I know a woman who just lost $100k on an investment house. She still thinks that prices will go up next year and pay her back on her current residence. She has another hard lesson to learn. I expect to eventually see her in foreclosure.

[NotCranky]

djrobsd,

You are putting a very personal isue out on a “free for all” blog. You would never walk into a coffee shop or other location where a bunch of strangers are gathered and do that. You are going get what you get. If we want to play here,especially putting our personal issues or strong opinions out there, we can’t hardly complain about what we get. I do hope you get some good breaks going forward. I am not going to say bail or stay. It is great that you are trying ot tackle the issue from all angles. I agree with bsrharma on the moral issue. Don’t let it become a pack of demons in your head forever what ever you do. You will have bigger problems than losing a house if you do.

Best wishes

[NotCranky]

djrobsd,

You are putting a very personal isue out on a “free for all” blog. You would never walk into a coffee shop or other location where a bunch of strangers are gathered and do that. You are going get what you get. If we want to play here,especially putting our personal issues or strong opinions out there, we can’t hardly complain about what we get. I do hope you get some good breaks going forward. I am not going to say bail or stay. It is great that you are trying ot tackle the issue from all angles. I agree with bsrharma on the moral issue. Don’t let it become a pack of demons in your head forever what ever you do. You will have bigger problems than losing a house if you do.

Best wishes

[NotCranky]

djrobsd,

You are putting a very personal isue out on a “free for all” blog. You would never walk into a coffee shop or other location where a bunch of strangers are gathered and do that. You are going get what you get. If we want to play here,especially putting our personal issues or strong opinions out there, we can’t hardly complain about what we get. I do hope you get some good breaks going forward. I am not going to say bail or stay. It is great that you are trying ot tackle the issue from all angles. I agree with bsrharma on the moral issue. Don’t let it become a pack of demons in your head forever what ever you do. You will have bigger problems than losing a house if you do.

Best wishes

[bsrsharma]

trying to keep the house instead of just walking away from it and making it someone else's problem?

djrobsd – one thing I strongly suggest is please don't cast this in a morality play mold. This is a financial crisis and you should try to do what makes best sense for you financially. If the best financial decision for you is to walk away, you should do it rather than suffer involuntary servitude for the next 30 years.

[bsrsharma]

trying to keep the house instead of just walking away from it and making it someone else's problem?

djrobsd – one thing I strongly suggest is please don't cast this in a morality play mold. This is a financial crisis and you should try to do what makes best sense for you financially. If the best financial decision for you is to walk away, you should do it rather than suffer involuntary servitude for the next 30 years.

[bsrsharma]

trying to keep the house instead of just walking away from it and making it someone else's problem?

djrobsd – one thing I strongly suggest is please don't cast this in a morality play mold. This is a financial crisis and you should try to do what makes best sense for you financially. If the best financial decision for you is to walk away, you should do it rather than suffer involuntary servitude for the next 30 years.

[djrobsd]

For the record “Cashing out a 401k” is not an option the IRS affords us here in America. There are severe penalties for doing so, and you see pennies on the dollar when it’s all said and done. Also for the record, I haven’t put any money into my 401k since I bought the house, I shifted all my investment dollars into the house which was obviously a bad investment, and an important lesson has been learned here. Even if I did cash out my 401k, that would only delay the pain another 3-6 months, and wouldn’t make that much difference at the end of the day.

A home is a HOME not an INVESTMENT. The mistake I made was I got caught into the buy now mentality that millions of other Americans got caught into back in 2004 when the real estate market was sky rocketing, and even though I was perfectly content in my $1500 a month luxury apartment with a pool, jacuzzi, work out room, and all the amenities, I couldn’t resist the evil temptation of “Sweet equity”. Had I thought of it apples to apples between the apartment and the house I bought, I would have taken the apartment any day of the week both for lack of having to do any maintenance and for all the on-site amenities that a gated new apartment community affords. And my loan officer and my realtor were coaching me all the way along making statements like “I know this payment will adjust in 3 years, but the market is so hot you’ll be able to sell or refinance before then”… Yep, we’ve heard all this before.

I made the mistake, and so now I have to live with it. Can you blame me for at least trying to work with my lender and trying to keep the house instead of just walking away from it and making it someone else’s problem? I’m trying to do other people who are also struggling a favor and sharing my experience with them so they know what they’re up against if they decide to try to do the same thing. I didn’t have to spend my time posting on here but I did so as a service to others. Sometimes I wonder if all you folks on here that say throw in the keys are the same ones that go buy these properties at real estate auctions!

[djrobsd]

For the record “Cashing out a 401k” is not an option the IRS affords us here in America. There are severe penalties for doing so, and you see pennies on the dollar when it’s all said and done. Also for the record, I haven’t put any money into my 401k since I bought the house, I shifted all my investment dollars into the house which was obviously a bad investment, and an important lesson has been learned here. Even if I did cash out my 401k, that would only delay the pain another 3-6 months, and wouldn’t make that much difference at the end of the day.

A home is a HOME not an INVESTMENT. The mistake I made was I got caught into the buy now mentality that millions of other Americans got caught into back in 2004 when the real estate market was sky rocketing, and even though I was perfectly content in my $1500 a month luxury apartment with a pool, jacuzzi, work out room, and all the amenities, I couldn’t resist the evil temptation of “Sweet equity”. Had I thought of it apples to apples between the apartment and the house I bought, I would have taken the apartment any day of the week both for lack of having to do any maintenance and for all the on-site amenities that a gated new apartment community affords. And my loan officer and my realtor were coaching me all the way along making statements like “I know this payment will adjust in 3 years, but the market is so hot you’ll be able to sell or refinance before then”… Yep, we’ve heard all this before.

I made the mistake, and so now I have to live with it. Can you blame me for at least trying to work with my lender and trying to keep the house instead of just walking away from it and making it someone else’s problem? I’m trying to do other people who are also struggling a favor and sharing my experience with them so they know what they’re up against if they decide to try to do the same thing. I didn’t have to spend my time posting on here but I did so as a service to others. Sometimes I wonder if all you folks on here that say throw in the keys are the same ones that go buy these properties at real estate auctions!

[djrobsd]

For the record “Cashing out a 401k” is not an option the IRS affords us here in America. There are severe penalties for doing so, and you see pennies on the dollar when it’s all said and done. Also for the record, I haven’t put any money into my 401k since I bought the house, I shifted all my investment dollars into the house which was obviously a bad investment, and an important lesson has been learned here. Even if I did cash out my 401k, that would only delay the pain another 3-6 months, and wouldn’t make that much difference at the end of the day.

A home is a HOME not an INVESTMENT. The mistake I made was I got caught into the buy now mentality that millions of other Americans got caught into back in 2004 when the real estate market was sky rocketing, and even though I was perfectly content in my $1500 a month luxury apartment with a pool, jacuzzi, work out room, and all the amenities, I couldn’t resist the evil temptation of “Sweet equity”. Had I thought of it apples to apples between the apartment and the house I bought, I would have taken the apartment any day of the week both for lack of having to do any maintenance and for all the on-site amenities that a gated new apartment community affords. And my loan officer and my realtor were coaching me all the way along making statements like “I know this payment will adjust in 3 years, but the market is so hot you’ll be able to sell or refinance before then”… Yep, we’ve heard all this before.

I made the mistake, and so now I have to live with it. Can you blame me for at least trying to work with my lender and trying to keep the house instead of just walking away from it and making it someone else’s problem? I’m trying to do other people who are also struggling a favor and sharing my experience with them so they know what they’re up against if they decide to try to do the same thing. I didn’t have to spend my time posting on here but I did so as a service to others. Sometimes I wonder if all you folks on here that say throw in the keys are the same ones that go buy these properties at real estate auctions!

[patientlywaiting]

djrobsd, are you the same person that said to accept the fact that people just want to own no matter what (perhaps for “peace of mind” and decoration purposes and not throw away rent)? What planet are you on?!

Are you also the same person who is bragging about 18% up on his 401k?

Why would the bank give you any slack? You need to cash out your 401k before they consider any help. Otherwise, they’ll see you in foreclosure. How are you funding your 401k when your expenses exceed your income?

[patientlywaiting]

djrobsd, are you the same person that said to accept the fact that people just want to own no matter what (perhaps for “peace of mind” and decoration purposes and not throw away rent)? What planet are you on?!

Are you also the same person who is bragging about 18% up on his 401k?

Why would the bank give you any slack? You need to cash out your 401k before they consider any help. Otherwise, they’ll see you in foreclosure. How are you funding your 401k when your expenses exceed your income?

[patientlywaiting]

djrobsd, are you the same person that said to accept the fact that people just want to own no matter what (perhaps for “peace of mind” and decoration purposes and not throw away rent)? What planet are you on?!

Are you also the same person who is bragging about 18% up on his 401k?

Why would the bank give you any slack? You need to cash out your 401k before they consider any help. Otherwise, they’ll see you in foreclosure. How are you funding your 401k when your expenses exceed your income?

[betting on fall]

I too thank you for the post, and I hope you keep us updated.

But. . . . to begin the “jumping all over,” I don’t think you really answered the question about what unexpected events happened since you took out the loan.
Your loan went up, just as it was supposed to. You fixed up the house, which should have been expected if the house needed it. You mention the $5000 plumbing problem. I have some sympathy there, but occassional costly problems are an expected part of homeownership.

If nothing has changed with regard to your income, do you really expect GMAC to re-write your agreement?

[betting on fall]

I too thank you for the post, and I hope you keep us updated.

But. . . . to begin the “jumping all over,” I don’t think you really answered the question about what unexpected events happened since you took out the loan.
Your loan went up, just as it was supposed to. You fixed up the house, which should have been expected if the house needed it. You mention the $5000 plumbing problem. I have some sympathy there, but occassional costly problems are an expected part of homeownership.

If nothing has changed with regard to your income, do you really expect GMAC to re-write your agreement?

[betting on fall]

I too thank you for the post, and I hope you keep us updated.

But. . . . to begin the “jumping all over,” I don’t think you really answered the question about what unexpected events happened since you took out the loan.
Your loan went up, just as it was supposed to. You fixed up the house, which should have been expected if the house needed it. You mention the $5000 plumbing problem. I have some sympathy there, but occassional costly problems are an expected part of homeownership.

If nothing has changed with regard to your income, do you really expect GMAC to re-write your agreement?

[djrobsd]

My payment has gone up on my 2nd mortgage $300 and now the first mortgage w/ GMAC has gone up $610, my credit card debts have also substantially increased making repairs and improvements to the property, when I purchased the property my credit card payments were $0, and now they are $450 a month! My income has not kept pace with the increased payments.

One could say I don’t know how to manage my money, and I’m sure there are plenty of you who will jump on that, but the truth is at least 75% of that credit card debt was used to improve or repair the property, including a $5000 plumbing disaster that occurred earlier this year.

[djrobsd]

My payment has gone up on my 2nd mortgage $300 and now the first mortgage w/ GMAC has gone up $610, my credit card debts have also substantially increased making repairs and improvements to the property, when I purchased the property my credit card payments were $0, and now they are $450 a month! My income has not kept pace with the increased payments.

One could say I don’t know how to manage my money, and I’m sure there are plenty of you who will jump on that, but the truth is at least 75% of that credit card debt was used to improve or repair the property, including a $5000 plumbing disaster that occurred earlier this year.

[djrobsd]

My payment has gone up on my 2nd mortgage $300 and now the first mortgage w/ GMAC has gone up $610, my credit card debts have also substantially increased making repairs and improvements to the property, when I purchased the property my credit card payments were $0, and now they are $450 a month! My income has not kept pace with the increased payments.

One could say I don’t know how to manage my money, and I’m sure there are plenty of you who will jump on that, but the truth is at least 75% of that credit card debt was used to improve or repair the property, including a $5000 plumbing disaster that occurred earlier this year.

[DaCounselor]

“Thanks for posting that, it’s very interesting. All the questions on the bank’s form are basic questions you should have asked yourself before getting into this loan… ”
__________________________________

Absolutely. And of course on the flip side, many of these detailed questions regarding finances should have been asked by the lender prior to approving the loan…

I applaud you for trying to work it out with your lender. I don’t know enough about the specifics of your situation, but if you cut an 80/20 deal to get into this property and still have the original loans, the lenders are probably facing a loss, maybe a significant loss, with no recourse against you.

You’re doing the right thing for now. If they won’t work it out with you, I would think about a sale or short sale, depending on your equity position.

And for God’s sake, don’t you cash out your 401K.

Keep us posted, if you would please. Thanks for sharing.

[DaCounselor]

“Thanks for posting that, it’s very interesting. All the questions on the bank’s form are basic questions you should have asked yourself before getting into this loan… ”
__________________________________

Absolutely. And of course on the flip side, many of these detailed questions regarding finances should have been asked by the lender prior to approving the loan…

I applaud you for trying to work it out with your lender. I don’t know enough about the specifics of your situation, but if you cut an 80/20 deal to get into this property and still have the original loans, the lenders are probably facing a loss, maybe a significant loss, with no recourse against you.

You’re doing the right thing for now. If they won’t work it out with you, I would think about a sale or short sale, depending on your equity position.

And for God’s sake, don’t you cash out your 401K.

Keep us posted, if you would please. Thanks for sharing.

[DaCounselor]

“Thanks for posting that, it’s very interesting. All the questions on the bank’s form are basic questions you should have asked yourself before getting into this loan… ”
__________________________________

Absolutely. And of course on the flip side, many of these detailed questions regarding finances should have been asked by the lender prior to approving the loan…

I applaud you for trying to work it out with your lender. I don’t know enough about the specifics of your situation, but if you cut an 80/20 deal to get into this property and still have the original loans, the lenders are probably facing a loss, maybe a significant loss, with no recourse against you.

You’re doing the right thing for now. If they won’t work it out with you, I would think about a sale or short sale, depending on your equity position.

And for God’s sake, don’t you cash out your 401K.

Keep us posted, if you would please. Thanks for sharing.

[DaCounselor]

“Thanks for posting that, it’s very interesting. All the questions on the bank’s form are basic questions you should have asked yourself before getting into this loan… ”
__________________________________

Absolutely. And of course on the flip side, many of these detailed questions regarding finances should have been asked by the lender prior to approving the loan…

I applaud you for trying to work it out with your lender. I don’t know enough about the specifics of your situation, but if you cut an 80/20 deal to get into this property and still have the original loans, the lenders are probably facing a loss, maybe a significant loss, with no recourse against you.

You’re doing the right thing for now. If they won’t work it out with you, I would think about a sale or short sale, depending on your equity position.

And for God’s sake, don’t you cash out your 401K.

Keep us posted, if you would please. Thanks for sharing.

[nostradamus]

Thanks for posting that, it's very interesting. All the questions on the bank's form are basic questions you should have asked yourself before getting into this loan… Just curious, how would you answer question 1?

What Event has caused your financial hardship (if necessary please attach an additional sheet)?

In other words, what has changed in your financial situation between now and the time you signed the loan docs?

[nostradamus]

Thanks for posting that, it's very interesting. All the questions on the bank's form are basic questions you should have asked yourself before getting into this loan… Just curious, how would you answer question 1?

What Event has caused your financial hardship (if necessary please attach an additional sheet)?

In other words, what has changed in your financial situation between now and the time you signed the loan docs?

[nostradamus]

Thanks for posting that, it's very interesting. All the questions on the bank's form are basic questions you should have asked yourself before getting into this loan… Just curious, how would you answer question 1?

What Event has caused your financial hardship (if necessary please attach an additional sheet)?

In other words, what has changed in your financial situation between now and the time you signed the loan docs?

[davelj]

djrob, thanks for sharing your story. A couple of comments.

OK, you were dumb. You’re probably going to cost whatever institution(s) lent you this money a lot of money and inconvenience (ultimately). They and their investors are unhappy with you and for good reason. You’re breaking the contract that you signed. So, this “loss mitigation” process that you apparently find so tedious (so many questions!) is supposed to be inconvenient. It’s supposed to be painful. Why? As I said, you’re about to cost the owners of your loan money. You’re the problem. It’s understandable.

Now, you realize you were dumb and you’re trying to “work this out.” That’s a start. However, it’s probably not going to work. Things are probably still too institutionalized and bureaucratized [may not be a word] for your efforts to get anywhere. Thus, for you personally it’s probably better to just walk away from this thing, take the dings to your credit and come back in seven years and try ownership again when you’re better prepared for it. It ain’t the end of the world. You rolled the dice and lost. Move on. Don’t dwell on it. But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.

[Raybyrnes]

“But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.”

Banks are in the business of lending money. They take a risk for the right to the interest they earn on their money. This borrower never defrauded the bank. It might not work out the way either party hoped but I don’t see a victim.

I won’t lose sleep when WAMU, Countrywide, Merrill Lynch or any other instituition loses money on an investment. It is a game that they play and in the end they will play right more than they play wrong.

Right now djrob has the tough choice of deciding whether the initial capital he used is at this point a SUNK cost or if there is still some intrinsic value in holding his property.

I tend to think that 401K should be a lock box principal so I agree with many of the othe posters who have suggested not raiding it. I also know others who see the 401k as a guarantee fund that can be thought of as an interst free loan. People have differnt way of looking at their money.

One thing that people havn’t thrown out there is the fact that if you continue to hold on and the environment deteriorates further the Federal Governemtn may step in to help the banks which might mean more potential to help you. Buying some additional time might not be a bad thing as there is a lot going on at the moment and with an election year coming up the Republicans are going to do what they can to save face. That might mean buying votes by trying to save peoples homes.

Ra

[djrobsd]

Ray,

You mention an interesting point there. While I’m sure they aren’t just going to force the banks to re-finance buyers at more affordable terms, it’s very likely they will get rid of the debt forgiveness tax. So, what are the odds this will be retroactive to a certain point? Or do you think they will sign it into law effective Jan 1, and anyone who threw the keys back before then are just going to be SOL?

We’ll see how it goes, my neighbor just reduced her place to 339k and I owe 345k on mine, so it’s not looking to good.

[Raybyrnes]

There are a lot of things that can happen. The average Joe thinks on the level of rates and points. The mechanics of mortgage backed securities occurs on the secondary market. If the government steps in and guarantees the loans they become more valuable to institutional purchasers. This provides lenders with better margins wherby they can reduce rates and remain profitable.

I hate to tell people to throw good money after bad money but there could be help around the corner. The bottom line is that you ahve to live somewhere for the time being and you still have a few years before the rates reset.

Besides that the winter is a bad time to be a seller and typically a good time to be a buyer. Those who have cash are really looking to low ball at this point. I would want to wait this out until some the the legislative dust settles.

There were a lot of people who bought at the high point in a lot of real estate cycles and those who were able to hold on did OK over THE LONG HAUL.

Besides that, you suggested that you liked your place in all of your posts. My thing to you is what are the job prospects? Any chance your income could rise by 10 or 20% over the next 1 to 5 years and if it’s not is there anything you could be doing to get it going in that direction.

[Raybyrnes]

There are a lot of things that can happen. The average Joe thinks on the level of rates and points. The mechanics of mortgage backed securities occurs on the secondary market. If the government steps in and guarantees the loans they become more valuable to institutional purchasers. This provides lenders with better margins wherby they can reduce rates and remain profitable.

I hate to tell people to throw good money after bad money but there could be help around the corner. The bottom line is that you ahve to live somewhere for the time being and you still have a few years before the rates reset.

Besides that the winter is a bad time to be a seller and typically a good time to be a buyer. Those who have cash are really looking to low ball at this point. I would want to wait this out until some the the legislative dust settles.

There were a lot of people who bought at the high point in a lot of real estate cycles and those who were able to hold on did OK over THE LONG HAUL.

Besides that, you suggested that you liked your place in all of your posts. My thing to you is what are the job prospects? Any chance your income could rise by 10 or 20% over the next 1 to 5 years and if it’s not is there anything you could be doing to get it going in that direction.

[Raybyrnes]

There are a lot of things that can happen. The average Joe thinks on the level of rates and points. The mechanics of mortgage backed securities occurs on the secondary market. If the government steps in and guarantees the loans they become more valuable to institutional purchasers. This provides lenders with better margins wherby they can reduce rates and remain profitable.

I hate to tell people to throw good money after bad money but there could be help around the corner. The bottom line is that you ahve to live somewhere for the time being and you still have a few years before the rates reset.

Besides that the winter is a bad time to be a seller and typically a good time to be a buyer. Those who have cash are really looking to low ball at this point. I would want to wait this out until some the the legislative dust settles.

There were a lot of people who bought at the high point in a lot of real estate cycles and those who were able to hold on did OK over THE LONG HAUL.

Besides that, you suggested that you liked your place in all of your posts. My thing to you is what are the job prospects? Any chance your income could rise by 10 or 20% over the next 1 to 5 years and if it’s not is there anything you could be doing to get it going in that direction.

[Raybyrnes]

There are a lot of things that can happen. The average Joe thinks on the level of rates and points. The mechanics of mortgage backed securities occurs on the secondary market. If the government steps in and guarantees the loans they become more valuable to institutional purchasers. This provides lenders with better margins wherby they can reduce rates and remain profitable.

I hate to tell people to throw good money after bad money but there could be help around the corner. The bottom line is that you ahve to live somewhere for the time being and you still have a few years before the rates reset.

Besides that the winter is a bad time to be a seller and typically a good time to be a buyer. Those who have cash are really looking to low ball at this point. I would want to wait this out until some the the legislative dust settles.

There were a lot of people who bought at the high point in a lot of real estate cycles and those who were able to hold on did OK over THE LONG HAUL.

Besides that, you suggested that you liked your place in all of your posts. My thing to you is what are the job prospects? Any chance your income could rise by 10 or 20% over the next 1 to 5 years and if it’s not is there anything you could be doing to get it going in that direction.

[Deserted]

Don’t overlook a critical point.

Fat_lazy_union and nostradamos are giving excellent advice, but I want to highlight one critical point that they’ve already brought up.

You probably have a non-recourse loan. I would advise you to get an expert third party to verify that. If true, GMAC will almost certainly want you to sign a new loan if they cut you any slack on the interest. This will almost certainly be a recourse loan. In your position, it sounds like a recourse loan would be a potential financial timebomb. DO NOT SIGN A RECOURSE LOAN UNDER ANY CIRCUMSTANCES.

As all other posters have pointed out, do not I repeat do not cash in your IRA to placate GMAC.

The time for assessing blame for getting into this loan is long past. For what it’s worth (not much), in my opinion offering these loans is the moral equivalent of giving car keys to someone who’s a staggering drunk.

[Deserted]

Don’t overlook a critical point.

Fat_lazy_union and nostradamos are giving excellent advice, but I want to highlight one critical point that they’ve already brought up.

You probably have a non-recourse loan. I would advise you to get an expert third party to verify that. If true, GMAC will almost certainly want you to sign a new loan if they cut you any slack on the interest. This will almost certainly be a recourse loan. In your position, it sounds like a recourse loan would be a potential financial timebomb. DO NOT SIGN A RECOURSE LOAN UNDER ANY CIRCUMSTANCES.

As all other posters have pointed out, do not I repeat do not cash in your IRA to placate GMAC.

The time for assessing blame for getting into this loan is long past. For what it’s worth (not much), in my opinion offering these loans is the moral equivalent of giving car keys to someone who’s a staggering drunk.

[Deserted]

Don’t overlook a critical point.

Fat_lazy_union and nostradamos are giving excellent advice, but I want to highlight one critical point that they’ve already brought up.

You probably have a non-recourse loan. I would advise you to get an expert third party to verify that. If true, GMAC will almost certainly want you to sign a new loan if they cut you any slack on the interest. This will almost certainly be a recourse loan. In your position, it sounds like a recourse loan would be a potential financial timebomb. DO NOT SIGN A RECOURSE LOAN UNDER ANY CIRCUMSTANCES.

As all other posters have pointed out, do not I repeat do not cash in your IRA to placate GMAC.

The time for assessing blame for getting into this loan is long past. For what it’s worth (not much), in my opinion offering these loans is the moral equivalent of giving car keys to someone who’s a staggering drunk.

[Deserted]

Don’t overlook a critical point.

Fat_lazy_union and nostradamos are giving excellent advice, but I want to highlight one critical point that they’ve already brought up.

You probably have a non-recourse loan. I would advise you to get an expert third party to verify that. If true, GMAC will almost certainly want you to sign a new loan if they cut you any slack on the interest. This will almost certainly be a recourse loan. In your position, it sounds like a recourse loan would be a potential financial timebomb. DO NOT SIGN A RECOURSE LOAN UNDER ANY CIRCUMSTANCES.

As all other posters have pointed out, do not I repeat do not cash in your IRA to placate GMAC.

The time for assessing blame for getting into this loan is long past. For what it’s worth (not much), in my opinion offering these loans is the moral equivalent of giving car keys to someone who’s a staggering drunk.

[djrobsd]

Ray,

You mention an interesting point there. While I’m sure they aren’t just going to force the banks to re-finance buyers at more affordable terms, it’s very likely they will get rid of the debt forgiveness tax. So, what are the odds this will be retroactive to a certain point? Or do you think they will sign it into law effective Jan 1, and anyone who threw the keys back before then are just going to be SOL?

We’ll see how it goes, my neighbor just reduced her place to 339k and I owe 345k on mine, so it’s not looking to good.

[djrobsd]

Ray,

You mention an interesting point there. While I’m sure they aren’t just going to force the banks to re-finance buyers at more affordable terms, it’s very likely they will get rid of the debt forgiveness tax. So, what are the odds this will be retroactive to a certain point? Or do you think they will sign it into law effective Jan 1, and anyone who threw the keys back before then are just going to be SOL?

We’ll see how it goes, my neighbor just reduced her place to 339k and I owe 345k on mine, so it’s not looking to good.

[djrobsd]

Ray,

You mention an interesting point there. While I’m sure they aren’t just going to force the banks to re-finance buyers at more affordable terms, it’s very likely they will get rid of the debt forgiveness tax. So, what are the odds this will be retroactive to a certain point? Or do you think they will sign it into law effective Jan 1, and anyone who threw the keys back before then are just going to be SOL?

We’ll see how it goes, my neighbor just reduced her place to 339k and I owe 345k on mine, so it’s not looking to good.

[Raybyrnes]

“But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.”

Banks are in the business of lending money. They take a risk for the right to the interest they earn on their money. This borrower never defrauded the bank. It might not work out the way either party hoped but I don’t see a victim.

I won’t lose sleep when WAMU, Countrywide, Merrill Lynch or any other instituition loses money on an investment. It is a game that they play and in the end they will play right more than they play wrong.

Right now djrob has the tough choice of deciding whether the initial capital he used is at this point a SUNK cost or if there is still some intrinsic value in holding his property.

I tend to think that 401K should be a lock box principal so I agree with many of the othe posters who have suggested not raiding it. I also know others who see the 401k as a guarantee fund that can be thought of as an interst free loan. People have differnt way of looking at their money.

One thing that people havn’t thrown out there is the fact that if you continue to hold on and the environment deteriorates further the Federal Governemtn may step in to help the banks which might mean more potential to help you. Buying some additional time might not be a bad thing as there is a lot going on at the moment and with an election year coming up the Republicans are going to do what they can to save face. That might mean buying votes by trying to save peoples homes.

Ra

[Raybyrnes]

“But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.”

Banks are in the business of lending money. They take a risk for the right to the interest they earn on their money. This borrower never defrauded the bank. It might not work out the way either party hoped but I don’t see a victim.

I won’t lose sleep when WAMU, Countrywide, Merrill Lynch or any other instituition loses money on an investment. It is a game that they play and in the end they will play right more than they play wrong.

Right now djrob has the tough choice of deciding whether the initial capital he used is at this point a SUNK cost or if there is still some intrinsic value in holding his property.

I tend to think that 401K should be a lock box principal so I agree with many of the othe posters who have suggested not raiding it. I also know others who see the 401k as a guarantee fund that can be thought of as an interst free loan. People have differnt way of looking at their money.

One thing that people havn’t thrown out there is the fact that if you continue to hold on and the environment deteriorates further the Federal Governemtn may step in to help the banks which might mean more potential to help you. Buying some additional time might not be a bad thing as there is a lot going on at the moment and with an election year coming up the Republicans are going to do what they can to save face. That might mean buying votes by trying to save peoples homes.

Ra

[Raybyrnes]

“But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.”

Banks are in the business of lending money. They take a risk for the right to the interest they earn on their money. This borrower never defrauded the bank. It might not work out the way either party hoped but I don’t see a victim.

I won’t lose sleep when WAMU, Countrywide, Merrill Lynch or any other instituition loses money on an investment. It is a game that they play and in the end they will play right more than they play wrong.

Right now djrob has the tough choice of deciding whether the initial capital he used is at this point a SUNK cost or if there is still some intrinsic value in holding his property.

I tend to think that 401K should be a lock box principal so I agree with many of the othe posters who have suggested not raiding it. I also know others who see the 401k as a guarantee fund that can be thought of as an interst free loan. People have differnt way of looking at their money.

One thing that people havn’t thrown out there is the fact that if you continue to hold on and the environment deteriorates further the Federal Governemtn may step in to help the banks which might mean more potential to help you. Buying some additional time might not be a bad thing as there is a lot going on at the moment and with an election year coming up the Republicans are going to do what they can to save face. That might mean buying votes by trying to save peoples homes.

Ra

[davelj]

djrob, thanks for sharing your story. A couple of comments.

OK, you were dumb. You’re probably going to cost whatever institution(s) lent you this money a lot of money and inconvenience (ultimately). They and their investors are unhappy with you and for good reason. You’re breaking the contract that you signed. So, this “loss mitigation” process that you apparently find so tedious (so many questions!) is supposed to be inconvenient. It’s supposed to be painful. Why? As I said, you’re about to cost the owners of your loan money. You’re the problem. It’s understandable.

Now, you realize you were dumb and you’re trying to “work this out.” That’s a start. However, it’s probably not going to work. Things are probably still too institutionalized and bureaucratized [may not be a word] for your efforts to get anywhere. Thus, for you personally it’s probably better to just walk away from this thing, take the dings to your credit and come back in seven years and try ownership again when you’re better prepared for it. It ain’t the end of the world. You rolled the dice and lost. Move on. Don’t dwell on it. But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.

[davelj]

djrob, thanks for sharing your story. A couple of comments.

OK, you were dumb. You’re probably going to cost whatever institution(s) lent you this money a lot of money and inconvenience (ultimately). They and their investors are unhappy with you and for good reason. You’re breaking the contract that you signed. So, this “loss mitigation” process that you apparently find so tedious (so many questions!) is supposed to be inconvenient. It’s supposed to be painful. Why? As I said, you’re about to cost the owners of your loan money. You’re the problem. It’s understandable.

Now, you realize you were dumb and you’re trying to “work this out.” That’s a start. However, it’s probably not going to work. Things are probably still too institutionalized and bureaucratized [may not be a word] for your efforts to get anywhere. Thus, for you personally it’s probably better to just walk away from this thing, take the dings to your credit and come back in seven years and try ownership again when you’re better prepared for it. It ain’t the end of the world. You rolled the dice and lost. Move on. Don’t dwell on it. But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.

[davelj]

djrob, thanks for sharing your story. A couple of comments.

OK, you were dumb. You’re probably going to cost whatever institution(s) lent you this money a lot of money and inconvenience (ultimately). They and their investors are unhappy with you and for good reason. You’re breaking the contract that you signed. So, this “loss mitigation” process that you apparently find so tedious (so many questions!) is supposed to be inconvenient. It’s supposed to be painful. Why? As I said, you’re about to cost the owners of your loan money. You’re the problem. It’s understandable.

Now, you realize you were dumb and you’re trying to “work this out.” That’s a start. However, it’s probably not going to work. Things are probably still too institutionalized and bureaucratized [may not be a word] for your efforts to get anywhere. Thus, for you personally it’s probably better to just walk away from this thing, take the dings to your credit and come back in seven years and try ownership again when you’re better prepared for it. It ain’t the end of the world. You rolled the dice and lost. Move on. Don’t dwell on it. But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.

[Coronita]

djrobsd,

 

Thanks for sharing your personal experience. You have a lot of courage to share publicly what is going on at a personal level. I hope things work out for you. The only thing I hope you don't do is don't cash your 401k. It's suppose to be your retirement nestegg. I could be wrong about this (and someone correct me if so) but I believe 401k accounts are exempt from creditors. Someone please confirm. If the bank can't work things out for you, I'd also recommend walking. Yes it's a ding on your credit. But you aren't going to be the only one, and after 7 years, when you're ready again, you can approach home ownership again. You might though want to secure if a rental place before this though.

 

Good luck. 

 

[nostradamus]

djrobsd again thanks for posting this info, it’s very enlightening. I don’t buy foreclosures and don’t think there are many shills for the foreclosure industry on this site. I would not benefit at all if you walk, except for a little schadenfreude and hopefully in a couple years prices can justify buying a home.

On blogs there are people who are frank and people who are dick (I stole that line from Planet Terror). If I were you I would be frank and tell your bank you’ve got your 401(k) and there’s no way in hell you’re going to raid it. There’s nothing they can do unless you’re in some kind of recourse loan. Don’t be scared of the bank, at this point you may wish to be completely forthright with them to see what kind of solution they come up with. If you provide them with false information it might bite you in the arse later. The bank might say “it’s OK to raid your 401(k) because if you invest it in the house it will be your nest egg in the future” but you just tell them “if I walk now I can keep the 401(k) I’ll worry less about a steep decline in value like in the housing market”.

Although one might say you were dumb, I think we can all agree that the lender and the fed were just as dumb and it took 3 to tango. Borrowers blame the lenders, lenders blame the fed, I don’t know who the fed is gonna blame (probably back on the borrower for false “stated income” or perhaps they’ll offer up Greenspan for the sacrificial fire).

[nostradamus]

djrobsd again thanks for posting this info, it’s very enlightening. I don’t buy foreclosures and don’t think there are many shills for the foreclosure industry on this site. I would not benefit at all if you walk, except for a little schadenfreude and hopefully in a couple years prices can justify buying a home.

On blogs there are people who are frank and people who are dick (I stole that line from Planet Terror). If I were you I would be frank and tell your bank you’ve got your 401(k) and there’s no way in hell you’re going to raid it. There’s nothing they can do unless you’re in some kind of recourse loan. Don’t be scared of the bank, at this point you may wish to be completely forthright with them to see what kind of solution they come up with. If you provide them with false information it might bite you in the arse later. The bank might say “it’s OK to raid your 401(k) because if you invest it in the house it will be your nest egg in the future” but you just tell them “if I walk now I can keep the 401(k) I’ll worry less about a steep decline in value like in the housing market”.

Although one might say you were dumb, I think we can all agree that the lender and the fed were just as dumb and it took 3 to tango. Borrowers blame the lenders, lenders blame the fed, I don’t know who the fed is gonna blame (probably back on the borrower for false “stated income” or perhaps they’ll offer up Greenspan for the sacrificial fire).

[nostradamus]

djrobsd again thanks for posting this info, it’s very enlightening. I don’t buy foreclosures and don’t think there are many shills for the foreclosure industry on this site. I would not benefit at all if you walk, except for a little schadenfreude and hopefully in a couple years prices can justify buying a home.

On blogs there are people who are frank and people who are dick (I stole that line from Planet Terror). If I were you I would be frank and tell your bank you’ve got your 401(k) and there’s no way in hell you’re going to raid it. There’s nothing they can do unless you’re in some kind of recourse loan. Don’t be scared of the bank, at this point you may wish to be completely forthright with them to see what kind of solution they come up with. If you provide them with false information it might bite you in the arse later. The bank might say “it’s OK to raid your 401(k) because if you invest it in the house it will be your nest egg in the future” but you just tell them “if I walk now I can keep the 401(k) I’ll worry less about a steep decline in value like in the housing market”.

Although one might say you were dumb, I think we can all agree that the lender and the fed were just as dumb and it took 3 to tango. Borrowers blame the lenders, lenders blame the fed, I don’t know who the fed is gonna blame (probably back on the borrower for false “stated income” or perhaps they’ll offer up Greenspan for the sacrificial fire).

[nostradamus]

djrobsd again thanks for posting this info, it’s very enlightening. I don’t buy foreclosures and don’t think there are many shills for the foreclosure industry on this site. I would not benefit at all if you walk, except for a little schadenfreude and hopefully in a couple years prices can justify buying a home.

On blogs there are people who are frank and people who are dick (I stole that line from Planet Terror). If I were you I would be frank and tell your bank you’ve got your 401(k) and there’s no way in hell you’re going to raid it. There’s nothing they can do unless you’re in some kind of recourse loan. Don’t be scared of the bank, at this point you may wish to be completely forthright with them to see what kind of solution they come up with. If you provide them with false information it might bite you in the arse later. The bank might say “it’s OK to raid your 401(k) because if you invest it in the house it will be your nest egg in the future” but you just tell them “if I walk now I can keep the 401(k) I’ll worry less about a steep decline in value like in the housing market”.

Although one might say you were dumb, I think we can all agree that the lender and the fed were just as dumb and it took 3 to tango. Borrowers blame the lenders, lenders blame the fed, I don’t know who the fed is gonna blame (probably back on the borrower for false “stated income” or perhaps they’ll offer up Greenspan for the sacrificial fire).

[Coronita]

djrobsd,

 

Thanks for sharing your personal experience. You have a lot of courage to share publicly what is going on at a personal level. I hope things work out for you. The only thing I hope you don't do is don't cash your 401k. It's suppose to be your retirement nestegg. I could be wrong about this (and someone correct me if so) but I believe 401k accounts are exempt from creditors. Someone please confirm. If the bank can't work things out for you, I'd also recommend walking. Yes it's a ding on your credit. But you aren't going to be the only one, and after 7 years, when you're ready again, you can approach home ownership again. You might though want to secure if a rental place before this though.

 

Good luck. 

 

[Coronita]

djrobsd,

 

Thanks for sharing your personal experience. You have a lot of courage to share publicly what is going on at a personal level. I hope things work out for you. The only thing I hope you don't do is don't cash your 401k. It's suppose to be your retirement nestegg. I could be wrong about this (and someone correct me if so) but I believe 401k accounts are exempt from creditors. Someone please confirm. If the bank can't work things out for you, I'd also recommend walking. Yes it's a ding on your credit. But you aren't going to be the only one, and after 7 years, when you're ready again, you can approach home ownership again. You might though want to secure if a rental place before this though.

 

Good luck. 

 

[Coronita]

djrobsd,

 

Thanks for sharing your personal experience. You have a lot of courage to share publicly what is going on at a personal level. I hope things work out for you. The only thing I hope you don't do is don't cash your 401k. It's suppose to be your retirement nestegg. I could be wrong about this (and someone correct me if so) but I believe 401k accounts are exempt from creditors. Someone please confirm. If the bank can't work things out for you, I'd also recommend walking. Yes it's a ding on your credit. But you aren't going to be the only one, and after 7 years, when you're ready again, you can approach home ownership again. You might though want to secure if a rental place before this though.

 

Good luck. 

 

[Anonymous]

A fool and their money are soon parted. FYI, you don’t buy a home if you are broke. You don’t buy a home if you don’t have an emergency fund in place. When you use a credit card, you are giving yourself a HIGH INTEREST LOAN. And, if you don’t pay that loan off at the end of the month, you are LIVING ABOVE YOUR MEANS. You are faking your lifestyle. I can tell you, I have been broke, I have had big credit card debt and now I have no debt. The no debt, living within your means lifestyle is much more comfortable. The borrower truly is slave to the lender. For the last couple of years I’ve beem debt free. I don’t use a credit card, only debit. And do you know that I forget when my paycheck gets automatically deposited.

Reading your posts, you have tricked yourself into believing that you could afford the house. You should have looked at the worse case interest amount before you signed the load papers. If you couldn’t afford the home when the loan reset, you should have walked away.

I don’t feel sorry for you one little bit. You signed your name to a document, now, you want some easy way out because so many Americans are not taking personal responsibility for their actions. I think they shouldn’t allow you to get off easy. But, you’ll probably declare bankruptsy and be back in a few years to do it all over again, not learning anything from your foolish actions.

_______________________________________
Zero debt and paid for house.

[Anonymous]

A fool and their money are soon parted. FYI, you don’t buy a home if you are broke. You don’t buy a home if you don’t have an emergency fund in place. When you use a credit card, you are giving yourself a HIGH INTEREST LOAN. And, if you don’t pay that loan off at the end of the month, you are LIVING ABOVE YOUR MEANS. You are faking your lifestyle. I can tell you, I have been broke, I have had big credit card debt and now I have no debt. The no debt, living within your means lifestyle is much more comfortable. The borrower truly is slave to the lender. For the last couple of years I’ve beem debt free. I don’t use a credit card, only debit. And do you know that I forget when my paycheck gets automatically deposited.

Reading your posts, you have tricked yourself into believing that you could afford the house. You should have looked at the worse case interest amount before you signed the load papers. If you couldn’t afford the home when the loan reset, you should have walked away.

I don’t feel sorry for you one little bit. You signed your name to a document, now, you want some easy way out because so many Americans are not taking personal responsibility for their actions. I think they shouldn’t allow you to get off easy. But, you’ll probably declare bankruptsy and be back in a few years to do it all over again, not learning anything from your foolish actions.

_______________________________________
Zero debt and paid for house.

[Anonymous]

A fool and their money are soon parted. FYI, you don’t buy a home if you are broke. You don’t buy a home if you don’t have an emergency fund in place. When you use a credit card, you are giving yourself a HIGH INTEREST LOAN. And, if you don’t pay that loan off at the end of the month, you are LIVING ABOVE YOUR MEANS. You are faking your lifestyle. I can tell you, I have been broke, I have had big credit card debt and now I have no debt. The no debt, living within your means lifestyle is much more comfortable. The borrower truly is slave to the lender. For the last couple of years I’ve beem debt free. I don’t use a credit card, only debit. And do you know that I forget when my paycheck gets automatically deposited.

Reading your posts, you have tricked yourself into believing that you could afford the house. You should have looked at the worse case interest amount before you signed the load papers. If you couldn’t afford the home when the loan reset, you should have walked away.

I don’t feel sorry for you one little bit. You signed your name to a document, now, you want some easy way out because so many Americans are not taking personal responsibility for their actions. I think they shouldn’t allow you to get off easy. But, you’ll probably declare bankruptsy and be back in a few years to do it all over again, not learning anything from your foolish actions.

_______________________________________
Zero debt and paid for house.

[Anonymous]

A fool and their money are soon parted. FYI, you don’t buy a home if you are broke. You don’t buy a home if you don’t have an emergency fund in place. When you use a credit card, you are giving yourself a HIGH INTEREST LOAN. And, if you don’t pay that loan off at the end of the month, you are LIVING ABOVE YOUR MEANS. You are faking your lifestyle. I can tell you, I have been broke, I have had big credit card debt and now I have no debt. The no debt, living within your means lifestyle is much more comfortable. The borrower truly is slave to the lender. For the last couple of years I’ve beem debt free. I don’t use a credit card, only debit. And do you know that I forget when my paycheck gets automatically deposited.

Reading your posts, you have tricked yourself into believing that you could afford the house. You should have looked at the worse case interest amount before you signed the load papers. If you couldn’t afford the home when the loan reset, you should have walked away.

I don’t feel sorry for you one little bit. You signed your name to a document, now, you want some easy way out because so many Americans are not taking personal responsibility for their actions. I think they shouldn’t allow you to get off easy. But, you’ll probably declare bankruptsy and be back in a few years to do it all over again, not learning anything from your foolish actions.

_______________________________________
Zero debt and paid for house.

[Author]

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