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Home > Ask The Get Out of Debt Experts > My Husband is Active Duty Military. We Can’t Live Together Because of the Mortgage. – Lisa

My Husband is Active Duty Military. We Can’t Live Together Because of the Mortgage. – Lisa

“Dear Steve,

My husband’s employer did drastic pay cuts in 2009. He left his job of 13 years and joined the Army. Our 1st duty station was Germany. We were able to rent our house out, but the renters left after the lease was up in Sept. Property management company couldn’t rent it out, we couldn’t afford the payment.

Mortgage company offered a modification but only if we were living in the home, so last Jan. my son and I left my husband and Germany to come back to live in it. We completed all paperwork, made all trial payments, signed modification docs and made the first payment, which was only $50.00 lower, on time.

They have never finished the mod, just keep telling me it’s still pending but that I should keep making payments. I am now refusing to make payments until they get the mod done. He is due to return to the states in June. I’m tired of living apart. No hope of selling the home, our area was hit hard by recession. I have now spent over a year trying to get the mod. I originally thought if I could get a lower payment we could continue to rent it out or even sell it as contract for deed.

In Sept. I received a letter from NationStar, our mortgage company, stating that, as long as my husband is active duty military, we are protected from foreclosure. Is this true? And if so, what should we do as he is planning to make this a career, and we will constantly relocate.

Lisa”

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The Answer

Dear Lisa,

While the lender may not be able to foreclose while he is on active duty, that really doesn’t solve the underlying problem. You can read more about the Soldiers’ and Sailors’ Civil Relief Act. It’s now actually called the Servicemembers Civil Relief Act (SCRA).

It seems to make sense that if you are going to make the military a career and actually live together, that you might have to consider doing a short sale or letting the house go back to the lender and possibly follow that up with a bankruptcy to fully break your chains to the mortgage and any deficiency that might be due afterwards. That way you could put the house behind you and get your family back together.

Right now I hear you saying there are two things which are a priority to you. But which is more important? Do you want to move forward with your life or stay here and deal with the house issue?

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

My Husband is Active Duty Military. We Cant Live Together Because of the Mortgage.   Lisa
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Lisa

    A year ago I came back to the house because we felt it would “save” our credit. The mortgage company assured us that we would qualify for the modification and even quoted an interest rate of 3% which would have significantly lowered our payment.  We had hoped to be able to rent it out again, or possibly sell it, even if we had to do a contract for deed type of sale, when we relocated again. I guess we have been hoping the economy would start to pick up again. The documents I signed had the interest rate set at 5% and extended the term of the loan to 40 years. It only lowered the payment by about $50.00 per month so it hasn’t really helped much but I was still willing to do it because it seemed to be the “right” thing to do.  It was supposed to go into effect on Aug. 1, 2011 but never has. They keep telling me that Fannie Mae hasn’t finished it. In the mean time, the delinquent balance just keeps adding up and they have not applied any of the payments I did make so I feel there is no point in continuing to make payments.
     Last Dec., before my son and I moved back here, I had asked if we could do a short sale, (I had no idea what that was exactly and still don’t really), the customer service rep said “not a good idea, if you want to save your credit”. But they also said any payments I made would be applied to the delinquent balance and they have yet to apply one cent. I guess at this point our credit is ruined anyway, and as there are no signs of economic recovery in this area, we will end up losing the house anyway. I hate both of those things but when he is relocated back to the states in June I just really want to live together as a family.
    So should I contact the mortgage company and inquire again about doing a short sale? Can you explain to me how those work or point me to a source that can?
    Thank you for your help, for me and everyone else you talk to. It’s very hard to find anyone to give advice without charging for it these days…

    • http://GetOutOfDebt.org Steve Rhode

      Credit is actually easy to rebuild in 12-24 months. Being afraid of having bad credit really isn’t as big a deal as many imagine it to be.

      Do you want to move back to be with your husband on duty or continue to be apart and hope this works out?

      A short sale is where the lender gives permission to sell the house for less than you owe. It can result in a negative mark on your credit, the lender in some cases may try to go after you for the amount forgiven from you, and it can take 6 months or more to get all the pieces together to complete a sale.

      So what’s your priority, get your family back together or stay apart and hope to resolve this in a way that does not impact your credit.

      • Lisa

        At this point I only want to be able to move with my husband when he is relocated back to a stateside assignment in June, 2012. (the Army won’t authorize me to return to Germany)
        With a short sale, who determines the asking price? The amount we owe is about $92,000, but there is no way we could sell it for that now. What if the house doesn’t sell, even with a short sale? And if the mortgage company agrees to a short sale can they still hold us responsible for the difference if it does sell, for less than we owe?

      • http://GetOutOfDebt.org Steve Rhode

        OK. Find a local real estate broker that has experience in short sales. Call your mortgage company and ask them for short sale information and the process.

        If the house does not sell then you are still obligated for the mortgage. The mortgage company could hold you responsible but many will waive that. That should be detailed in the short sale process between you and your lender. If it does not specifically mention that potential in any arrangement you have with your lender for the short sale you need to negotiate with the lender to waive any deficiency owed from the approved sale.

      • Lisa

        I will do that. Thanks so much for all that you do to help people like me!

      • http://GetOutOfDebt.org Steve Rhode

        No worries. Just keep me posted and feel free to comment on other posts to help others.

  • Lisa

    A year ago I came back to the house because we felt it would “save” our credit. The mortgage company assured us that we would qualify for the modification and even quoted an interest rate of 3% which would have significantly lowered our payment.  We had hoped to be able to rent it out again, or possibly sell it, even if we had to do a contract for deed type of sale, when we relocated again. I guess we have been hoping the economy would start to pick up again. The documents I signed had the interest rate set at 5% and extended the term of the loan to 40 years. It only lowered the payment by about $50.00 per month so it hasn’t really helped much but I was still willing to do it because it seemed to be the “right” thing to do.  It was supposed to go into effect on Aug. 1, 2011 but never has. They keep telling me that Fannie Mae hasn’t finished it. In the mean time, the delinquent balance just keeps adding up and they have not applied any of the payments I did make so I feel there is no point in continuing to make payments.
     Last Dec., before my son and I moved back here, I had asked if we could do a short sale, (I had no idea what that was exactly and still don’t really), the customer service rep said “not a good idea, if you want to save your credit”. But they also said any payments I made would be applied to the delinquent balance and they have yet to apply one cent. I guess at this point our credit is ruined anyway, and as there are no signs of economic recovery in this area, we will end up losing the house anyway. I hate both of those things but when he is relocated back to the states in June I just really want to live together as a family.
    So should I contact the mortgage company and inquire again about doing a short sale? Can you explain to me how those work or point me to a source that can?
    Thank you for your help, for me and everyone else you talk to. It’s very hard to find anyone to give advice without charging for it these days…

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