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Written by Admin
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Monday, 03 December 2007 15:41 |
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Hi Chuck, We hope you can help us with a big mess that we're in with our home. In the past year, we had a significant loss of income that has caused us to currently be three months behind on our mortgage once our interest rate adjusted (we have a 3/1 ARM). We just can't seem to catch up. The bank sent us a letter informing us of their plan to begin foreclosure if we don't get current. We don't have the money, so we've decided to sell our home. The only problem is we owe more on it than it's worth. Our current payoff is almost $195,000 but a realtor told us we'd be lucky to get $185,000 for it in the current market. We desperately want to avoid foreclosure, but don't know if we have any other options. How would you guide us? Desperate in Detroit, Rhonda & Bill Wow guys, I really feel for your situation. You've gotten caught in a "perfect economic storm" -- sucked into the ongoing economic downturn in Michigan that likely caused your income to drop, a languishing local housing market and a mortgage payment that increased at the worst possible time. Unfortunately, you're not the first (or last) couple that has approached me with almost identical circumstances. Your magic bullet: Short Sale. You're currently "upside down" in your loan since you owe more than it's worth. On top of that, you'll also facing closing costs of at least 5-6% (at a minimum) to sell the home. In other words, you're currently about $20,000 "upside down".
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