LifeSaver asked:
I tried to re-finance my 1st and 2nd mortgage with these two banks and was not successful due to owing more on my mortgages than my house is worth (& high credit card debt of about $25K). My spouse and I have student loans to pay for ($60K) and it is very depressing for us. What can we do to fix this financial and emotional problem. More details..we make over $200K per year but the bills and unexpected situations keep coming up. It is now affecting our marriage and we may be separating because of this financial tornado. we have two kids and a dog to care for also. It is tough but right now we are just maintaining to pay bills from pay check to pay check. How do we attack these issues without killing one another and becoming angry about it when we bring up the subject? Are there any highly seasoned real estate agents or financial gurus (anyone w.knowledge) to help us? Any internet or 800#’s? We need help REALLY bad!!
KERMIT
I tried to re-finance my 1st and 2nd mortgage with these two banks and was not successful due to owing more on my mortgages than my house is worth (& high credit card debt of about $25K). My spouse and I have student loans to pay for ($60K) and it is very depressing for us. What can we do to fix this financial and emotional problem. More details..we make over $200K per year but the bills and unexpected situations keep coming up. It is now affecting our marriage and we may be separating because of this financial tornado. we have two kids and a dog to care for also. It is tough but right now we are just maintaining to pay bills from pay check to pay check. How do we attack these issues without killing one another and becoming angry about it when we bring up the subject? Are there any highly seasoned real estate agents or financial gurus (anyone w.knowledge) to help us? Any internet or 800#’s? We need help REALLY bad!!
KERMIT
BOBBIE
Hang in there and keep paying that bill.
JACQUES
If you have some kind of hardship (loss of a job, must relocate for work, etc.), you may qualify for a short sale, where the bank takes less for the house than what you owe on it and forgives the debt. And “the house is worth less than what I owe on it” is not a hardship.
The only other option is foreclosure, where you just walk away from making the payments. However, this is a harder hit on your credit history and the bank could come after other assets (liens on other real or personal property).
I do keep hearing on the radio about some law or government program that went into effect that allows you to renegotiate credit card debt if you owe more than $10,000. You might look into something like that.
In the mean time, you’re in a situation that a whole lot of people have gotten into over the last few years, mortgaging themselves to the hilt to pay for their extravagant lifestyles. So, cut back on luxuries. Only buy what’s essential. Eventually, you’ll start making more money and the value of real estate will come back up. You’ll then either be able to afford your current situation or will at least be able to bow out gracefully.
And, just so you know – getting a divorce will not make any of the problems go away. In fact it will magnify them many times. So, don’t even consider that as an option.
LORENZO
Unfortunately with negative equity and two separate notes, in your case not many options, if you can not get the first note to refinance both notes. See the first note will not refinance its note alone because then the second note become the first note in line after the refinance. Kind of leaves you in a catch 22.
Best bet is two work it out and hang in there until the market approves, a separation / divorce will only ruin your credit and bring you down a road best not to travel
THURMAN
You and your spouse made some VERY poor financial decisions along the way, and now they are coming back to haunt you. You apparently borrowed money against your house at a 100 percent LTV ratio, which was your first poor decision. Buying that expensive a house with over $85,000 in debt was another stupid move. Sad to say, you are going to have to live with the effects of those decisions.
Your income level will prevent any consideration for ‘hardship’ whatsoever. If you insist on dumping the house, foreclosure is your only option. Think you have problems NOW ? Wait until you have a foreclosure on your credit report.