Looking for advice on how to approach my mortgage company.

Anyway, here's my situation that I'd like some advice on if possible. I'm a homeowner that's behind on my house payments by several months, due to loss of work/lower pay by both myself and my husband. We have since moved into our RV and have renters in our house, but they only pay $1200 per month and my first and second mortgage combined is $1355 per month, plus POA fees and pest control. If I call my lender and am truthful with them that I have renters in my house, will they consider combining my 2 loans and lower the monthly payments to $1200 and move the 9 grand I owe them the the end of the loan? Or is that out of the question? Otherwise I'm at a loss as what to do. Cause I can't afford to use any of my income to catch up on the past due months, as my RV payment is basically a house payment it's self.
Should I do nothing and let them just take the house if they won't agree to my plan? I'm not concerned with keeping the house at all, and making a profit on it or even breaking even is a joke at this point. I know my credit will take a huge hit, but honestly my only concern keeping current on my RV payments as that is where we want to permanently live.
Any advice would be greatly appreciated. :D

Edited: 06/26/2010 at 09:40AM

Valerie Pedigo

· Panama (South of Buffalo), New York

77 posts
505 Influence
3 Awards

Icon_minipost Sep 10 '09, 05:59 AM

I'm sorry that you are in this situation - I wish you the best of luck.

Have you contacted your loan company at all?

If you are not concerned with keeping the house, you can ask them about Deed in Lieu of Foreclosure. But, if you are behind $9000 - I'm guessing 6 months- it may be too late. You should have applied for a hardship in hindsight.

Do you have a lease agreement with your renters? I'm concerned that if you are foreclosed upon, you will have tenant rights to deal with.

You absolutely have to call your lender and find out the options available. Please also check with your attorney about any liabilities you may have with your lease agreement if this all results in foreclosure.

Have you asked the tenants if they are interested in purchasing the home?

Edited: 06/26/2010 at 09:40AM

Elizabeth Sullivan

· South Carolina

2 posts
16 Influence

Icon_minipost Sep 10 '09, 06:57 AM

Thank you.

Originally posted by Valerie Pedigo

"Have you contacted your loan company at all?"

I spoke with my loan company a few months ago and was in the process of trying to refinance when my father passed away. I'm just now getting back to a place where I can mentally deal with my financial problems. I haven't been in contact with them since. And wanted to get some advice before contacting them again.

"Do you have a lease agreement with your renters? I'm concerned that if you are foreclosed upon, you will have tenant rights to deal with."

My renters are friends that needed a place to live, but can't afford to buy, so we just have a verbal agreement as to the price of rent and they know they may have to leave at anytime.

"You absolutely have to call your lender and find out the options available. Please also check with your attorney about any liabilities you may have with your lease agreement if this all results in foreclosure."

I don't have an attorney, and really can't afford one. Do I have to have one before contacting my loaner?

Edited: 06/26/2010 at 09:40AM by Elizabeth Sullivan

James Harkness

Real Estate Lender · Philadelphia, Pennsylvania

229 posts
2343 Influence
4 Awards

Icon_minipost Sep 10 '09, 12:06 PM

Hi Elizabeth. I am sorry to hear that you are in this situation. I work for a mortgage company doing "loss mitigation". This means that when loans fall 60 days delinquent, the file gets referred to me. Once I get the file, I am responsible for contacting the borrower, and finding out what the situation is. If there is a hardship (ie lost their job) then I discuss ways to make the loan perform again. There are several options available. The first is a reinstatement, where you pay back the entire balance that you owe and you become current with the loan. This is obviously not an option for you. Then there is what is called a forbearance where you pay what you owe back over a set period of time, say 6 months. This will also probably not work for you based on what you are saying. The other options to consider are a Stip to Mod, and a Modification. Both of these result in the terms of your loan being changed, often by extending the term of the loan and lowering the interest rate. The result is a lower monthly payment. The other options are an assumption, where you find someone to take over your mortgage (often on modified terms), a short sale (where you sell the house for less than what you owe), or a deed in lieu. I would say that a modification would be the best move for you. And as long as your property has not already been foreclosed upon, it is not too late. I have executed modifications as close as 2 days before the property was supposed to be foreclosed upon.

Remember, at this point, the mortgage company is most interested in mitigating its loss. They will compare any scenario to the cost of foreclosing (which is VERY costly and the worst case scenario in many situations for the lender).

Best of luck to you.

Edited: 06/26/2010 at 09:40AM

Jon Holdman

Real Estate Investor · Denver, Colorado

11859 posts
75547 Influence
15 Awards

Icon_minipost Sep 10 '09, 12:48 PM

How much is the house worth vs. what you owe? Have you tried to just sell it? From you statements about "not making a profit" or even breaking even, it seems like you may not be too far underwater. Even if you are underwater you may be able to sell with a short sale.

It would be much better for you to kick the tenants out and live in the place and do a short sale. The IRS considers forgiven debt as income. There is an exception for this if the property is your primary residence, which it was until you put tenants in there. As an investment property, I don't believe that exception applies. It seems like you could get them out and move back in and avoid the tax liability.

Since you want to be rid of the house, a short sale, or just a sale if there's enough equity, seems like the best solution.

Edited: 06/26/2010 at 09:40AM

Jon Holdman, Flying Phoenix LLC