I own a home in Phoenix, AZ that I purchased in Oct 2004 ... I purchased the home through a mortgage broker and later refinanced the exact $$ amount of my mortgage with my credit union - Navy Federal. I took no money out just swapped the mortgage to NFCU and rolled in the closing costs. A year later I took out a 2nd mortgage with NFCU to build a pool and do landscaping. All $$s were used for this and put back into the property.

I am now needing to do a short sale. I originally had a second borrower on my loan who contributed to paying half of the mortgage. 4 years ago we terminated our relationship and NFCU removed his name from the loan. Since then, my job has restructured our pay packages that has affected my total annual compensation about -$20,000 annually. My pay has fallen continuously over the past four years and we have had no raises in five years. Though I still make an annual income of just over $80,000 ...

Now, I am facing a potential relocation with my employer to California in June. I have tapped out my savings and stock accounts to cover the mortgage over the past 4 years and refuse to cash out my small 401K or start writing credit card checks to cover the mortgage.

 

A year ago, I appealed to NFCU for a loan modification. I do not qualify under the government loan mod programs so they offered me the opportunity to apply for their in-house loan mod program. Upon review of my financials, they said they 'doubted' I would qualify and if I did it might only lower my payment $50 a month or so. To qualify for 'consideration' for this in-house loan mod program, they required that I become delinquent on my payments ... sort of. They required I stop making my full payment and only pay them interest for 3 months. During which time they would report me to the credit bureaus in a 'non-payment' status. After the 3 month period they would then review my financials again and decide if they would modify my loan. All of this took 3 months just to get to this point.


I opted to not go that route as becoming delinquent and taking the hit on my credit with a 'maybe' seemed risky and might make me ineligible for other potential programs out there, etc. 

So now, after much consideration I want to proceed with a short sale as I have exhausted every other option short of leveraging myself financially beyond repair. I have met with a short sale specialist in AZ that seems very knowledgable and has an excellent BBB rating. I am completing the stack of paperwork he requested this weekend and will begin the process next week.

One question though:

I have had mixed opinions on whether I should continue making my mortgage payments ... what to do? I will need to be able to rent an apartment or house if I can get this place sold ... and fear if I stop making payments and they run my credit that I may not qualify to rent?? Any money I retain by not making my mortgage payments would be put towards credit card balances.

I have moved all of my accounts away from NFCU - checking & savings and had my Mother take me off her account as a joint owner -- I was on her account in the event of any medical issues. I have heard NFCU likes to seize $$s.

Any tips would be very appreciated.

The facts:
Credit Score: Over 750
Mortgage balance 1st and 2nd both w/ NFCU: $267,400
Estimated Value based on comps: $110,000
Mortgage type: conventional w/ home equity loan
Never missed a payment or late
All bills are current - no lates
Credit Card Debt: $11,000
Savings balance: $2,000

Thanks,
M

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