I bought my home in 1999 and have two mortgages. The 2nd mortgage was in 2005 for home improvements. I was married a year ago and my husband and I were both laid off, he is Dec. 08 and I in March 09.
Currently the 2nd mortgage is headed for foreclosure, the payment is $260.00 but was reduced to $142.00 on a six month hardship program which ended 9/31/09. My husband is working now but child support takes half so he nets less than unemployment. I’m still not working and we are struggling.
I asked my 1st mortgage for assistance and they reduced the note to $500.00 from $897 for three months, which ends 10/1/09. I told the 1st mortgage about the foreclosure of the 2nd and they offered me a one month forebearance to pay the 2nd mortgage $500.00 to get it current as of 10/31/09.
The problem is another payment is due 10/31/09 on the 2nd mortgage and can’t pay it. We are now $1900.00 in arrears with the 1st mortgage and $500.00 in arrears with the 2nd. I don’t see any way out except to walk away, but my husband doesn’t want to.
He thinks we can get on a payment plan with both mortgages and keep the house. With his income cut in half at $12.00 an hour he can’t help me pay any bills. My work income was net $2400.00 a month and his was $2000.00 a month, we are now getting only $2300.00 a month. I want to just walk away but I was told that the bank may come after me for the difference in the loan after they sell house.
That would be a disaster, since I can’t pay them now how will I pay them later. We both owe the IRS in back taxes, we have two car notes, one credit account for our wedding rings that we have not been paying because we can’t afford it, utilites, food, gas, cell phones, etc.
My question is, should we walk away or would I have to put the house in my husband’s name for him to file bankruptcy on it?
First off, you can’t transfer the home into his name alone and then go bankrupt on it.
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So where does that leave us? I had to read your question over a couple times before I caught a subtle point in it. You’ve been doing all the legwork on the loans but now your husband thinks the banks will play ball and give you a better deal. That my dear is what I call denial on his part.
You’ve done a good job and worked the bank process and managed to get some concessions but I’m not all that confident that you can get additional meaningful modifications since there is little evidence to support your ability to make even modified payments.
Here is what I think you need to do, play into your husbands ego and suggest that you could really use his help to workout some new deals with the bank you can meet. Let him try to work something out. He will either run into a brick wall or come up with a plan that is not going to be sustainable. Either way, it will help him to come face to face with reality and then be prepared to make the decisions he will need to make. Once he can accept the reality then he will be prepared to walk away and go bankrupt to close the door on this mess.
Unless something changes bankruptcy is probably in your future but until we can get your husband to see that, it has a possibility of creating a rift between you. We don’t want your husband to think this situation was a failure of your ability to negotiate. We need him to see it for what it is, numbers that don’t add up.