Joe wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

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“Dear Steve,

Over-extended. Lost my job in May, Citi Mortgage will not modify the terms of my Mortgage. I have not paid the mortgage for several months, but have paid all my cc bills. I am out of money, Citi wants to put me on a forbearance plan that adds 2k to my payment each month… I don’t have the money for the down payment. I will be starting a new job in mid Feb and just need Citi to work with me a bit longer. They don’t seem to care that I owe 310K on a house that is now worth 260K, maybe… I am a Real Estate agent and I know exactly what this house is worth in this neighborhood in this Market… why are they not willing to work with me?? I have been talking to them for 3 months or more and can’t get a straight answer!!

Should I file for Bankruptcy?

Joe”

The Answer:

Dear Joe,

You know it really pisses me off when I hear and read that lenders are being so wonderful and understanding in helping people to modify their mortgages so they can stay in the home. Lenders and banks are not doing that. They are making it as tough and tiresome as possible for people that want so help to stay in their home.

The hopeful side of me Joe says you should continue the food fight and it will work out. But the realist side of me says that with all of this running downhill on you that giving the house back, going bankrupt and starting over might be the quicker way to repair your credit, start a better financial life and move forward. Click here for a free bankruptcy consultation.

The reason they are not willing to work with you is that the money owed to Citibank is handled by people that are only following a policy or procedure from management. It has nothing to do with logic or commonsense.

Joe, if you ever find yourself in a situation like this again, pay the secured debts first and put the unsecured credit card debts aside. No sense worrying about that now, it’s water under the bridge but a good lesson learned.

According to information on my loss mitigation list, Citi wrote in and said that if people send an email to [email protected] they should get a response back within two days. I’m not holding my breath on a successful solution from them but I’d loved to be proved wrong.

Steve