Sorry, long, but need advice.

[tripods68]

The new Obama's plan will defnitely help you cuz it takes away the cap 105% LTV.

[Alice in Chains]

The new Obama's plan will defnitely help you cuz it takes away the cap 105% LTV.

Really? I had not heard about the plan minus the 105% clip? The jist of it, from what I remember, is a 5.1% mortgage, fixed for 30 years? Is that correct? If so, we'd take it, probably pay MORE than we pay now, but be okay with that. At least we'd be in a fixed mortgage. We're really tell the CC companies to get in line at that point.
I don't like the idea of the HOPE program, having our principle reset, and then owing the govt 50% of whatever we make down the line, screw that. We're not THAT far upside down, and live in a nice area in Orange County, CA. Our value hasn't taken the beatings that other areas have, and probably has more of a shot at recovering long and short term than others do.

[swaymonae]

Don't take offense, but it seems like you're in a boat that you put yourself in by not being as financially responsible as you could have been.

You have a history of making not so great financial decisions, and your responses imply you intend to make even more bad financial decisions.

Not being concerned with your FICO is going to cost you big time, IF you get out of your current financial state.. it's going to drag you down for years to come.

Maybe it's time to suck it up and start making better decisions.. which usually are more difficult/time consuming.

[creditcardfree]

With the new plan, your loan has to be held by Freddie or Fannie. You have to call your lender to see if it is or not. Also your mortgage payment with taxes and insurance has to be more than 31% of your gross income. Does this apply to you?

[Alice in Chains]

Don't take offense, but it seems like you're in a boat that you put yourself in by not being as financially responsible as you could have been.

You have a history of making not so great financial decisions, and your responses imply you intend to make even more bad financial decisions.

Not being concerned with your FICO is going to cost you big time, IF you get out of your current financial state.. it's going to drag you down for years to come.

Maybe it's time to suck it up and start making better decisions.. which usually are more difficult/time consuming.

Why would I take offense? I've stated in numerous posts that we were reckless, so there's no epiphany going on here.

My responses imply I intend to make more? How so? I've asked for advice, and have posted what I think we may do, which is pay down our debt and get into a better loan. Unfortunately, with our current state of finances, some people aren't going to get any money for awhile, but I'm not running from my debts.

I am concerned about my FICO, but at this point, don't think there's any way around the fact it's going to dip for a few years. So be it.
I do agree, it is time to suck it up and start making better decisions. I just am looking at all options to see which ones are best long term for me and my family, that's all. After all, it's only money!

[Alice in Chains]

With the new plan, your loan has to be held by Freddie or Fannie. You have to call your lender to see if it is or not. Also your mortgage payment with taxes and insurance has to be more than 31% of your gross income. Does this apply to you?

It does, yes. I'll call our lender to find out the rest, thanks.

[arthurb999]

Short sell your house and rent.
Start living on cash only... no more credit cards for ANYTHING!
Sell your cars and buy 2 for 3000 cash each.
Stop the retirement savings.
Get a 2nd job or send the wife to work and pay off the cc’s. (make any deals you can with them… int rate, lump sum payments)

Come back when all that is done for round 2.

[tripods68]

Really? I had not heard about the plan minus the 105% clip? The jist of it, from what I remember, is a 5.1% mortgage, fixed for 30 years? Is that correct? If so, we'd take it, probably pay MORE than we pay now, but be okay with that. At least we'd be in a fixed mortgage. We're really tell the CC companies to get in line at that point.

http://www.treas.gov/press/releases/reports/guidelines_summary.pdf

Eligibility and Verification
•
Loans originated on or before January 1, 2009.
•
First-lien loans on owner-occupied properties with unpaid principal balance up to $729,750. Higher limits allowed for owner-occupied properties with 2-4 units.
•
All borrowers must fully document income, including signed IRS 4506-T, two most recent pay stubs, and most recent tax return, and must sign an affidavit of financial hardship.
•
Property owner occupancy status will be verified through borrower credit report and other documentation; no investor-owned, vacant, or condemned properties.
•
Incentives to lenders and servicers to modify at risk borrowers who have not yet missed payments when the servicer determines that the borrower is at imminent risk of default.
•
Modifications can start from now until December 31, 2012; loans can be modified only once under the program.
Loan Modification Terms and Procedures
•
Participating servicers are required to service all eligible loans under the rules of the program unless explicitly prohibited by contract; servicers are required to use reasonable efforts to obtain waivers of limits on participation.
•
Participating loan servicers will be required to use a net present value (NPV) test on each loan that is at risk of imminent default or at least 60 days delinquent. The NPV test will compare the net present value of cash flows with modification and without modification. If the test is positive
– meaning that the net present value of expected cash flow is greater in the modification scenario – the servicer must modify absent fraud or a contract prohibition.
•
Parameters of the NPV test are spelled out in the guidelines, including acceptable discount rates, property valuation methodologies, home price appreciation assumptions, foreclosure costs and timelines, and borrower cure and redefault rate assumptions.
•
Servicers will follow a specified sequence of steps in order to reduce the monthly payment to no more than 31% of gross monthly income (DTI).
•
The modification sequence requires first reducing the interest rate (subject to a rate floor of 2%), then if necessary extending the term or amortization of the loan up to a maximum of 40 years, and then if necessary forbearing principal. Principal forgiveness or a Hope for Homeowners refinancing are acceptable alternatives.
•
The monthly payment includes principal, interest, taxes, insurance, flood insurance, homeowner’s association and/or condominium fees. Monthly income includes wages, salary, overtime, fees, commissions, tips, social security, pensions, and all other income.
•
Servicers must enter into the program agreements with Treasury's financial agent on or before December 31, 2009.
Payments to Servicers, Lenders, and Responsible Borrowers
•
The program will share with the lender/investor the cost of reductions in monthly payments from 38% DTI to 31% DTI.
•
Servicers that modify loans according to the guidelines will receive an up-front fee of $1,000 for each modification, plus “pay for success” fees on still-performing loans of $1,000 per year.
•
Homeowners who make their payments on time are eligible for up to $1,000 of principal reduction payments each year for up to five years.
•
The program will provide one-time bonus incentive payments of $1,500 to lender/investors and $500 to servicers for modifications made while a borrower is still current on mortgage payments.
•
The program will include incentives for extinguishing second liens on loans modified under this program.
•
No payments will be made under the program to the lender/investor, servicer, or borrower unless and until the servicer has first entered into the program agreements with Treasury’s financial agent.
•
Similar incentives will be paid for Hope for Homeowner refinances.

[Alice in Chains]

Well, so much for that. Our loan not owned by Freddie / Fannie. Jumbo loan....


Next call to Chase to see what they will do for us.

[arthurb999]

Well, so much for that. Our loan not owned by Freddie / Fannie. Jumbo loan....


Next call to Chase to see what they will do for us.

Why not do something for youself and shortsell it and rent an apartment until you get your financial disaster sorted out?



Short sell your house and rent.
Start living on cash only... no more credit cards for ANYTHING!
Sell your cars and buy 2 for 3000 cash each.
Stop the retirement savings.
Get a 2nd job or send the wife to work and pay off the cc’s. (make any deals you can with them… int rate, lump sum payments)

Come back when all that is done for round 2.

[Seeker]

Why not do something for youself and shortsell it and rent an apartment until you get your financial disaster sorted out?

Short sell your house and rent.
Start living on cash only... no more credit cards for ANYTHING!
Sell your cars and buy 2 for 3000 cash each.
Stop the retirement savings.
Get a 2nd job or send the wife to work and pay off the cc’s. (make any deals you can with them… int rate, lump sum payments)

Come back when all that is done for round 2.

Renting in Orange County is not exactly cheap either. In fact, probably not possible with three kids in one bedroom and adults in the second bedroom for under $2k per month in that area of California.

They both already are working.... though the OP has taken a pay cut because of the economy. 70k upside down. Three kids.

Selling the cars and gettign out from those loans are a must in this situation... so is getting whatever income that is possible out of this. No real answers can be posted until a budget is listed.

[Alice in Chains]

Why not do something for youself and shortsell it and rent an apartment until you get your financial disaster sorted out?



Short sell your house and rent.
Start living on cash only... no more credit cards for ANYTHING!
Sell your cars and buy 2 for 3000 cash each.
Stop the retirement savings.
Get a 2nd job or send the wife to work and pay off the cc’s. (make any deals you can with them… int rate, lump sum payments)

Come back when all that is done for round 2.

We love our house and have no desire to relocate, not yet. I'd rather bite the bullet and pay off other things slowly, hope the market recovers. We've looked at the short sell, rent option, but with two kids in high school, do not want to go through all that right now.
We have stopped the credit cards, and are using cash only. I am going to work on the cards, now that we're starting to be late on multiple accounts, maybe now they will listen. (they didn't a month ago)
We're trying, but sorry, are not willing to give up our house yet. We put 80k down on our home, and have invested more (windows, floors) so I'm not ready to kiss that goodbye just yet. I just found out a comp sold for 550k, we owe about 570, so we're not horribly upside down.

[Alice in Chains]

Renting in Orange County is not exactly cheap either. In fact, probably not possible with three kids in one bedroom and adults in the second bedroom for under $2k per month in that area of California.

They both already are working.... though the OP has taken a pay cut because of the economy. 70k upside down. Three kids.

Selling the cars and gettign out from those loans are a must in this situation... so is getting whatever income that is possible out of this. No real answers can be posted until a budget is listed.

Yup, and at the very least the interest helps us come tax time. I will look into the cars, however having something "decent" is a must for my job, as I'm in the field with clients part of the time. Not like my wife has anything major, a Scion that is a couple years old and has maybe 8k left on it with a decent rate.

We need to be prudent with our spending, see what WAMU/Chase will do for us, and get the credit cards paid down. I'll start selling stuff where I can on ebay, craigs list, and again, some creditors are going to have to wait. Our credit will take a hit for awhile, but the goal is for us to be out of this mess in 5 years, and at that point, decide if we want to relocate.

[maat55]

I would keep making the house payment and do Obama's plan if possible.

If you are not able to stay current on all your cards, I would not pay them at all and save as much money as you can to make short offer payoffs. I would start with the smallest card first and offer 30% to 50% payoffs. It will take a few months of not making payments before they will settle.

This will hurt your credit of course, but you will be able to settle for less. I would not use a consolidation company.

You will need to get on a tight budget and concentrate on saving money for the payoff offers to settle as quickly as possible.

This build up of cash may come in handy if you loose your job, unexpectedly.

[Alice in Chains]

I would keep making the house payment and do Obama's plan if possible.

If you are not able to stay current on all your cards, I would not pay them at all and save as much money as you can to make short offer payoffs. I would start with the smallest card first and offer 30% to 50% payoffs. It will take a few months of not making payments before they will settle.

This will hurt your credit of course, but you will be able to settle for less. I would not use a consolidation company.

You will need to get on a tight budget and concentrate on saving money for the payoff offers to settle as quickly as possible.

This build up of cash may come in handy if you loose your job, unexpectedly.

I've thought of doing this as well. Our credit is going to be hurt no matter which path we take, and I'm okay with that for the next few years.