Another Underwater home - different approach

3 Replies

I have been trying to figure out how to get rid of my underwater home for a while.  I recently became disabled, and moved away from a mortgage I could no longer afford.  I have luckily found a renter to help make the payment (still about $150 short per month).  I can afford this amount just fine, it's everything else that bothers me.  A little info:

Home has a current mortgage of $98,000 with a monthly payment (PITI) of $875 (been going up lately due to insurance and tax rate hikes). Home is worth $85,000 or so.

Home is in a neighborhood that has only been decreasing in value.  When this home was purchased (early 2007), neighborhood was nice and on the rise.  When the crash happened, this neighborhood was hit hard with foreclosures and short sales.  It is now a poorer neighborhood and will probably get poorer with time.

I am tired of pouring money into this place, as maintenance seems to be fairly high (partly due to neighborhood, partly to my own stupidity - bought something I shouldn't have because "it looked pretty").  Taxes and insurance keep going up, even with my challenging taxes and shopping around for insurance.  Property is in another state as well, so I have a property manager to help me deal with the day-to-day.  Yet another expense.  I don't particularly like not being able to actually see the condition of the property either.

My thought was to try to sell it at the current mortgage price and have the buyer loan out the $13000 or so still owed.  Or try to get a bank loan.  I would have to keep the payment amount at $200/mo or less for this to even make sense.  Is this even possible?  Are there alternatives?  I have talked to the bank about a short sale, and they don't want to do one, even though I threatened to walk away.  I would rather come up with a solution that allows me to uphold my end of the contract anyway, but one that doesn't cost me this much.  Every year, I watch my owed amount go down at the same rate as my house value.

Please help!

Who owns your loan, and who services it? Is it a FANNIE, Freddie, VA, FHA? There will be a credit hit with a short sale, and you'd have to show a hardship that make you not able to afford it.

Originally posted by @Wayne Brooks :

Who owns your loan, and who services it? Is it a FANNIE, Freddie, VA, FHA? There will be a credit hit with a short sale, and you'd have to show a hardship that make you not able to afford it.

That's part of the problem. The loan is a VA loan, but it is neither a fannie or freddie owned loan. Ocwen services it, and they determined that I can afford it (of course, they counted the income from the rental and excluded maintenance costs). I am unsure who finally owns it, only that I originated it with USAA (who has also been unhelpful - pushing it off to Ocwen).

Again, I would rather avoid the short sale or foreclosure situation.  I am in school right now and would like to purchase another home down the road.  I am not going to be able to do that if my credit is ruined.  Just trying to find other options that would be less expensive right now and release my current obligation to this property.

When you are upside down on a house there is very little you can do. Offer it to your renter if they have $13,000.00 to pay you as a down payment and let them pretty much have it and continue paying the rental amount until the mortgage is paid down some more. 

Whatever you do you are pretty much stuck with it. You do not want to do anything that will affect your credit very badly. Live for tomorrow my friend, live to fight again another day.