Have you, would you do your own loan modification?

[Radiance]

Hello,

I am borderline, meaining that my mortage is only 26% of my income.

I should be fine, but after making financial statement, I am $300 short each month. Lately I made up for it by eating less and using some of my few savings, charging at times, but none of those options are sustainable; I am now underweight, getting sick often, only 120 left on the savings account and with 520 in debt of a cc that was already zero balance just 5 months ago.

Granted, some of the numbers on my financial statement were estimates (clothing, good, household items) I am working to get actual, real numbers by tracking everything I buy (And I always ensure it is a need and not a want).
Looking at old statements will not provide what I need since my spending habits have changed dramatically.

I worked those numbers with a financial advisor and she only thought my cell phone bill was too high at $80, the rest was in average and needed. Including $400 for support I send to my parents, who are both disabled.

So, more that being unable to pay my mortgage, I am just too tight.
Any emergency will leave in the red. With a baby and two parents who depend on me, emergencies are part of the territory.
I need to budget for 12% fund for emergencies, which I can not do right now.

I live alone with my 16 month old baby. The father only helps with $100 a month... long story.

What I am thinking is to try a loan modification on my own, dealing directly with the lender. Yes, I am considering renting a room, but with a baby in the house, I am a concerned about safety. Also I need to consider the added stress of having my privacy highly disturbed. but I am still considering it.

I am also looking into a part time job, but I need to have time to spend with my son, that is not negotiable, I rather go foreclosure than having two jobs and never see my son. So, for now I could work on Saturdays where my baby is with his dad.

I am tempted to spend $50-80 on a DIY guide to loan mod and do it myself. I have done that before with other financial/legal issues with positive results.

What do you think? If I get my loan mod I will have the financial space to manouver that I need, and deserve.

[creditcardfree]

Yes, I would call your lender and ask about loan modification. I don't know exactly what you are referring to regarding the $50-$80, however.

Can you sell your home? Is renting an option? Sorry, if this was answered in another one of your posts.

[Merch]

Wow. You are in a tough situation.

If I were you, I would track everything you spend and then start cutting. You may have to drop the cell phone and cable to afford the house, or cut the grocery bill by using coupons. But the first step is to look at where you are and determine a plan from there.

Once you have a abudget and one you can live on, then I would start looking at your options. Do you need to sell your house? Would it be better to move in with your parents to take care of them and reduce your housing costs?

I would work on a realastic budget first, look at all expenses (including loan modification), and come up with a plan. Your on the right path.

[Radiance]

oh, the $50-80 would be the cost of a book on Loan modifications, so I can educate myself, use the right language and the appropiate templates to negotiate. It is like a Do-it-yourself guide.

My house is under water, I owe 269k and the house is worth 200k.
Selling would be a short sale.

Renting is not an option since the rent would be 1500 and the mortgage payment, including HOA is 2200.

What I think of doing is demonstrating it is very hard for me to afford current payment but if they take the interest rate down to 3.0% I can afford it and keep the house. I have very good credit and have never been late with them.

What does that sound?

[Radiance]

Mersh,

While I can cut in costs, I don't see more than $300 at the most and that is what I am short on. I will confirm soon when I finish my tracking and lookin at the results. Cable is 40, plus 80 of cell is 120 bucks....

My parents live overseas, sorry forgot to mention. That is good for me, that is the only way I can support them with just $400 a month. If they were here I don't know what I would do.

I don't do hair dresser, I don't buy clothes unless the ones I have break, I don't do dry cleaning. I really can not cut much else. See what I mean?

[Merch]

I see what you are saying.

Simply, there are two variables: expenses and income. If you can't cut expenses any more, then you will need to find a way to increase your income. It may be a different field then just more hours.

I know it's not simple, but it is the reality. You might have to cut the moeny you send your parents in half, cancel cable, and cancel the cell phone. That would get you to $300 a month. Anything extra you get in a month, you can throw towards an EF.

I am not saying the decision is easy. It is very difficult. Once you have your expenses down, you should prioritize them. Food and Shelter at the top of the list. Transportation next. Utilities next. When you run out of money, that's what you will need to cut from your lifestyle.

Again, I am not trying to imply you are living high of the hog or are irresponsible. I am just saying you have some very tough decisions, but you need to take care of your and your child's needs (not wants) first before you can help other people.

I do wish you the best of luck and I honestly think that you will be able to find a solution that works.

[Granite]

I would not do my own loan modification. I would not buy a book on it. I would call my current lender and negotiate, or simply refinance with a new lender.

As far as a room mate, advertise on Craigslist for a room for rent for a single mom with baby. You can trade babysitting & support each other during these tough economic times.

[disneysteve]

I am working to get actual, real numbers by tracking everything I buy (And I always ensure it is a need and not a want).

my cell phone bill was too high at $80

My house is under water, I owe 269k and the house is worth 200k.
Selling would be a short sale.

Renting is not an option since the rent would be 1500 and the mortgage payment, including HOA is 2200.

Cable is 40, plus 80 of cell is 120 bucks

Cable TV is a LUXURY.
Cell phone is a LUXURY.
They both need to go.

I don't understand your statment about renting not being an option if it would save you $700/month over what you pay now. Do a short sale. You can't afford the house. Get out now and start over.

[Radiance]

I understand those things being a luxury.
In my newbieness, however, I fail to understand how $120 would make such a difference in my life right now in the big scheme of things.

Cable can go, I don't care, I can take dvd's from the library, but what difference will $40 make?

As per the cell phone, I have a little baby and I need to be in touch with the school, I know there are cheaper plans out there, le'ts say I get a $20 pre-paid, that is $60 savings, plus 40 from cable, that is 100, a month.

MY cell is unlimited everything (calls, internet and text) because I have been a customer for over 20 months, if I cancel I loose that...

Contrasting with the services I get, what difference will that make in the big scheme of things? If that is what it takes, I rather sacrifice my privacy and rent one room for $500 so I can continue with cable and full service cell phone.

I love the idea to rent to another single mom, by the way!

Maybe I am being naive, and I am certainly unexperienced in managing my finances, but something doesn't add up with cutting corners that are little corners. By doing that I create lacking.

This is why I feel strongly into making a bigger cut and get my mortgage payment down via negotiation.

Please don't get offended with my pretensions, I am a very practical person and simplistic too. Remember I said, I am very tight, but I can pay all my bills each month. What I want to fix is my inability to deal with unexpected expenses.

on renting I thought he was talking about renting my house...sorry.
Of course if I rent for me I would be saving a lot of money. Duh me.

As per short sale, not that easy to get the bank to approve unless I am behind, which I am currently not

I am used to live comfortably, I believe in abundance. No doubt about it.
But at the same time I am not a shopaholic, comfortably for me is being able to pay all my bills, have one-three months of expenses on a savings account, being able to spend some money each month on entertainment and self improvement, lets say 100, and, at the moment, being able to continiously reduce my unsecured debt.

Please take my words for face value, it is not my intension to offend anyone. I think I don't need to be broke to come here and ask for advise...yes?

[tripods68]

As per short sale, not that easy to get the bank to approve unless I am behind, which I am currently not

Be late on your mortgage....otherwise lender won't do anything for you.

[GREENBACK]

As per the cell phone, I have a little baby and I need to be in touch with the school, I know there are cheaper plans out there, le'ts say I get a $20 pre-paid, that is $60 savings, plus 40 from cable, that is 100, a month.

I understand your concern here but did you know that once upon a time there weren't cell phones? Parents could be reached by other means. We all didn't need to know what each other was doing 24 hrs. a day. Lose the phone. Unless you're willing to chip away at this, you won't find a solution.

I understand that your parents are disabled and I truly can understand your sending money to them but you must get your situation corrected in order to truly help them. I think any parent would insist on this.

I'm not a female but I'd tell baby daddy to start coughing up his fair share. Sorry that I don't know the "long story" but it's his child too.

[disneysteve]

what difference will $40 make?

I think this is very much about mindset as much as it is about dollars and cents. Will reducing expenses by $40/month solve your problems? No, probably not. But what if you have 2 $40 expenses that you could cut, or 3, or 4? All of those "little" cuts add up - cutting out cable TV, buying generic frosted flakes, line drying your clothes, whatever. Living below your means is a lifestyle choice. You can choose to have cable TV and a cell phone and go out to eat regularly and buy new clothes every season or you can choose not to do and have those things.

I also agree 100% with GREENBACK. Cell phones are a very recent phenomenon. Ten years ago, most people didn't have them. Twenty-five years ago, they didn't even exist. In a very short period of time, they became must-have items when the reality is they are total luxury items. Just because they've gotten relatively cheap and easily accessible does not change the fact that they are luxuries.

[zetta]

What I think of doing is demonstrating it is very hard for me to afford current payment but if they take the interest rate down to 3.0% I can afford it and keep the house. I have very good credit and have never been late with them.

Market rates are somewhere around 5-5.5%. You're not going to get a rate of 3% no matter how well you negotiate. You need to find another alternative to either bring in more money, spend less, or get rid of the house.

Your best bets seem to be:
* Go after the baby's father for child support through the legal system (assuming he makes any money that could be garnished)
* Take in a roommate
* If your loan is above 6%, see if you can refinance to the current market rates
* Look into getting out of your house (short sale or foreclosure) and renting an apartment
* Could you rent your house out to someone else for enough to cover the mortgage, and rent a cheaper place for yourself?
* See if you qualify for WIC, foodstamps, or other assistance
* Apply for jobs that pay more than your current one.
* Small cuts do add up. Find 3 ways to save $100 or 6 ways to save $50 per month.
* Send less to your parents.

[Runaway Finances]

Wealthy Me,

All those $40 here and there add up to several hundred. Steve's right, $700/mo savings by renting is huge. Plus, what happens if you have a major repair on the house? If you have a major repair where you rent, the landlord pays it.

If the cell phone is your only phone (ie. no land line) then I can justify the cell phone, but not all the frills that come with it. It doesn't take many minutes to just stay in touch with your child's school.

Getting your finances in shape will take really tough sacrifices. It won't be easy but your life will be so much better and less stressful once you get your finances in control.

You have a lot of responsibilities on your shoulders. I admire you for taking care of your parents as I feel we should do. You can do this if you want it bad enough. There is a lot of "free" help out there. I would not pay for that book or whatever. I would make a call to your lender. I have no experience at this, but I have recently heard several stories of people making calls and lenders making changes. They won't all do that, but it is not going to hurt you to try. Be straight with them. It is going to help if you have a plan you can send them to show your financial situation. You may have to be late on your payments before they will do anything though. I have one friend that was told that by their credit card companies.

[Radiance]

Thank you so much everybody, this is all very good stuff.
I understand, leaving within my means is indeed a choice...Which I have to make, I want to make.

I can not approach the bank until I have a clear understanding of my own finances. And until I finish my fine tuning. I know all my fixed bills, including payments to credit cards. I am tuning down to my discretionary.

[Currently, unfortunatelly, the money I send my parents is for their food, medicines, very basic stuff. I just can not turn my back in them. I am their only resource.]

Baby steps, I need to have a clearer picture of my discretionary... I know that after bills I have 1461. That needs to cover:

Food
Household
Baby diapers
Baby toys
Baby clothes
Baby food
Gas & tolls
Help for my parents - 400

Medicines - I gues I should make this one as a bill, but I am not sure how much it is right now. I do not do prescription drugs (against my beliefs) so I do natural only, which is less expensive (and more effective) , but not covered by insurance. - I guess 100.

What do you think? 1400, enough, too low? One mom and her baby.
This is with my current hardship approved with the bank.
hmmm - I have some thinking to do...

I think I see a roommate in my near future