What would you do?

[wincrasher]

Grammie,

Kudos to you and your husband for being such hard workers. It's awful to have to work such hours and make so much less. All your choices have big downsides, as you know.

I'd echo the advice to hang on if you think income will improve within 6 months. I'd suspend the 401k for now to give you a bit more room each month - with the market as volatile as it is, who's to say that these contributions aren't being thrown away? You still have time to save for retirement, especially with the costs of kids behind you. A border is an excellent idea - maybe there is someone you know in similar straights.

[grammie]

I just read a story in the local paper about many people all across the country who had the same thing happen to them that happened to us. When they called the bank to discuss financial problems etc, the bank told them to stop making payments so they could help them via a loan modification. They are not supposed to do this but they are. The one bank that did speak to the reporter (wells fargo) denied ever having told anyone that even though the reporter spoke to several families who said that was exactly the instructions they got. We, like these other families, are in a no win situation. The bank told us not to make payments so they could help us with a loan mod, then they drag their feet so that we wind up several months behind. The only way the bank would allow us to make payments right now is if we catch up on all the past payments plus late fees...we don't have that much money. My husband is trying hard to find a job that pays what his previous job payed but he works in an ailing industry so we can't count on that. We can't take in a border because it's against the HOA rules. We're already having problems with them because my son has been with us for two months while he hunts for a job. Only two cars are allowed per home so we have to park his car at a friends house and he has to get a ride to it when he needs it. Arthur, we had the financial planner work out the numbers on selling the cars and he advised against it due to how much we'd still owe and the higher cost of gas and repairs for beaters, but thank you for the advice. So far this month we've cut our expenses by an additional $400 (and brought in an additional $80 by selling off most of our books) so if the bank will make some type of arrangement with us, we will be fine.

[creditcardfree]

Thanks for the update. You mention your husband work is in an ailing industry. If the industry is going by the wayside, is it time he get additional training/schooling in another industry? I'm just asking the question to give you something to think about for the future. You don't need to respond!

[grammie]

Yes, credit card free..he'd love to go back to school. With a 6 day work week and working 10 or more hours a day, it's hard for him to imagine having enough time or energy for school...and then there's the cost. I know we sure don't want another loan right now. At 55 yrs old, he's just hoping the industry will hang on long enough for him to make it to the finish line. Plus it is possible that the industry he's in will rebound when the economy recovers, although I think it's save to say this industry's golden years are behind it. I would mention the industry but I'm trying not to tell too much of his business on here since he values his privacy. I may choose to hang my dirty laundry out for all the world to see but I don't want to put him in that situation.

[cschin4]

Why are you paying your other bills and not your mortgage? That doesn't make any sense to me. The mortgage is the FIRST bill you should pay. And, you cannot just "walk away" as if you just move out and don't owe any money. You will still be held responsible for the loan you took out on your home whether you leave it or not. I think that "walk away" is a dangerous myth and one which is making you think that treading this water is safe.
As for your home, I don't advocate keeping your home if you can't afford it. What good is it to own a home that is expensive to pay and maintain and spend your life eating Ramen noodles. No thanks, I would rather have some financial peace of mind and some money in the bank and live in a studio apt rather than have that kind of headache.
So, your house value has dropped. That's life. Money comes and goes. Today is what matters. If I were you, I would find a way to pay and get current on your mortgage payments. Then, I would put the home up for sale and SELL IT FOR WHATEVER YOU CAN GET. Sorry, to yell, but let's all deal in realism. You may actually lose money on the house. And, you may sell it and still owe a hefty chunk but it will be much less than you owe now and over time you can live simply, pay it off and get on with your life instead of having a financial albatross strapped around your neck. It is what it is. Face up to it and your current financial situation and play hardball and you can get back to a place where you are comfortable and not living the stress of paycheck to paycheck.

[cschin4]

The bank told us not to make payments so they could help us with a loan mod,

The bank told you NOT to make payments? As for a loan modification, what exactly are you planning to do that you think is going to put you ahead down the road? If you have a 15 yr you could easily refi to a 30 yr. If you already have 30 yr, then you are not going to see much difference based on the interest rates. If you are planning on an interest only loan, then you simply cannot afford the house.
As for your "financial planner", they give general advice and they do not live your life for you. At this point, you need to stop throwing good money after bad. You need to realize that losses do occur. Knowing when to sell at a loss and stop any further hemorrhaging takes far greater wisdom and skill than knowing when to sell for a profit. There is no profit to be gained for you at this point. Only further and further losses until you are so deep in the hole that your head will spin and you will working like a dog until your dying day.
Again, I say these things as a wake up call which you already know and are trying to deal with. As for your son, if he has a car and lives with you, then he needs to start paying rent. He needs to get ANY job to bring in some money to pay his keep. And, perhaps you could sell one of your cars and he could shuttle one of you to work as part of his rent deal.

[grammie]

cschin4, I think you're right. Thanks for the wake up call.

[Justice44]

RE: What Would You Do?

Third, stop eating out and going out to have fun! $600/month on entertainment and fun when you can't afford your mortgage is RIDICULOUS.

Although it was said very bluntly, I unfortunately have to concur on this one.

[Justice44]

RE: What would you do?

Why are you paying your other bills and not your mortgage? That doesn't make any sense to me. The mortgage is the FIRST bill you should pay.

Cschin, you hit the nail on the head. Rent, food mortgage are bills necessary for survival. Mortgage is something that you do not want to play catch up with.

[Joan.of.the.Arch]

Justice44, I think the answer to your question is in one of Grammie's posts above:

The bank told us not to make payments so they could help us with a loan mod, then they drag their feet so that we wind up several months behind. The only way the bank would allow us to make payments right now is if we catch up on all the past payments plus late fees...we don't have that much money.