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Not sure which direction to go...please help

I recently went through the process of a loan modification with Bank of America.  I'm at the stage where they want me to sign a contract agreeing to pay a $44k balloon payment when I leave the home or when my loan matures.  I can't guarantee I'll stay in the home for 30 years nor do I have $44k.  From what I hear, they will foreclose on my home if I do not make that balloon payment at that time.

My other option is to short sell right now and move into a rental for an undetermined amount of time.  My husband lost his job a year ago and I would rather not move my kids more than once should he need to relocate for a job opportunity.

Last option is to toss the contract and spend every penny we have on the mortgage, making it extremely difficult if not impossible to pay our other bills such as utilities and cars.  Also, we would have to make a lump sum payment of $3k to pay back what we missed during the modification trial period.  Which I also do not have.

Are there any other options and what is the best route to go to?

Thanks
  • May 02 2014 - US
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Answers (5)

There may be another modification program/option out there that makes more financial sense.  

Which modification program were you approved for? Hamp tier 1, tier 2, traditional mod, fha, or other forbearance option?

What was the rate and terms of the mod offered?

This may give you another option...
 


 
  • May 18 2014
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Even with a loan mod it will effect you qualifying in the future vs. short sale and vs. foreclosure. I would say to work out the $3K payment arrangement with your lender to see if they can split the payments up to fit your budget. A balloon payment is not a good option, but either are your other choices. I would work the loan modification to get your payments down to start, then as your husband finds a job possibly set aside money and save. Once your loan mod term has capped out, refinance or sell. At that point hopefully your hisband will have a job and you'll have some savings to make the best decision for your family at aapoint when you're not under so much pressure. I wish the best for you.
  • May 02 2014
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Obviously you are stuck with several unappealing options.  And while at the heart of the issue is a mortgage, you are really seeking financial advice.  So let me preface my remarks by saying that I am not licensed to dispense financial advice, so before you decide you should speak to someone who is.

For me personally, the decision comes down to weighing the upside vs. the downside of each choice. It seems like you have totally ruled out trying to continue to make the current payments and you have ruled out renting your current home.  So you are left with two choices:  1) Short sale; 2) signing the agreement and risking future foreclosure. From the standpoint of damage to your credit rating, short sales hurt less than foreclosures, but they are still quite damaging.  That might suggest a short sale as the best option, but in your case this decision has no real upside other than putting a quick end to the problem.  However, signing the agreement with Bank of America does offer the possibility of keeping your home and being able to manage the payments.  This at least represents an upside. Obviously the decision is yours--I hope I helped you with the thought process.




  • May 02 2014
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Profile picture for rae0878
We wouldn't be able to make each month in rent what we owe for the mortgage.  We would again be taking a loss and struggling to pay the mortgage each month.
  • May 02 2014
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Profile picture for daveskow
can you rent present home for enough to cover the payment  and then  move into a rental yourself ?
  • May 02 2014
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