Profile picture for emilyoutlaw

my house payment has gone uo from 800.00 a month to 1900.00 a month cannot afford this ,what to do?

should i let it get foreclosed on and save up money, houses on my block are going for 20.000 to 30,000 how do i get my mortgage payment lowered? they wont work with you until you are very behind?
  • March 03 2010 - Dearborn Heights
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Answers (11)

Profile picture for The Maven
Hi, Ms Outlaw,

It sounds as if you may be considering keeping your home if it were more affordable for you.

If this true, I just want to ask you 3 questions before I 'm able to help you further....

1) In addition to the $800, How much more (since it sounds as if you were aware that your monthly note would increase) do you feel you would be able to pay without exceeding a 50% Debt-to-Income ratio?

Is it $200, $300, $400 max?

2) Are you able to provide proof of income over the last 12 months?

(I don't want to make any assumptions here...)

3) Are you finding your overwhelmingly upside down by at least 25%?

If you can honestly answer these, I may be able to tell you about something I've been seeing help folks save their homes and incredibly reduce their payment amounts, while they are still able to keep their homes.

Good Luck,
Hopefully I can help....

The Maven
  • March 12 2010
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Aren't those Option Arms fun? ..... Happy funding, Rudi
  • March 12 2010
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For starters, if you can afford the 800.00 payment, you may want to consider negotiating the tax escrows over a longer period of time. When a  lender pays the past due taxes, they generally look to recover the amount within twelve months.....that's why the payments are so steep for a year. Your lender may be willing to stretch the payments out over several years if you can afford a lower payment. We have helped some of our borrowers do exactly just that.

You may also be eligible for a loan modification, which can give you some breathing room in determining whether or not you want to stay in your home. You still have to live somewhere.

Some advocate against loan modifications as they might not be a permanent solution, but I have seen many of them that have been very beneficial to the borrowers.

With our falling real state prices here in Michigan, many borrowers are in exactly the same position, wondering why they stay in a home with a mortgage amount twice the value of what the home next door could be purchased for.  If you are eligible for a loan modification, it may be a good solution for the next 5 years.
  • March 12 2010
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It sounds as though you have an adjustable rate mortgage, meaning the house payment increases w/ a rise in the interest rate as per the loan agreement. Take heart knowing that most folks in the U.S. who own property are upside down = they owe more than the property's worth. 
If you're not late on your payments, you may be able to refinance at a lower, FIXED  RATE, however loan fees will hover around 1-3 percent of the note depending on points, etc. The lender ALWAYS has to give you a good faith estimate of costs BEFORE you sign a new loan.
If you can't continue to PAY the $1900, call the lender and tell them what's going on.
 These days, banks are working with borrowers not so much to help them, but to help the lenders' bottom line. They DON'T want to get stuck with a costly property and foreclosure proceedings.
ABOVE ALL, DON'T PANIC! CALL YOUR LENDER, ASAP AND START THERE. Good luck!
  • March 03 2010
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Profile picture for nickcole
Contact your lender and ask that your payment be reduced to it's original amount.  If you are not successful, contact a loan modification organization and have them explain the government program to save your home from foreclosure; one company that has advertised this type of service can be reached at: 800-943-1546
  • March 03 2010
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Profile picture for tonygim

Many people would not keep throwing good money after bad.

  • March 03 2010
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Profile picture for emilyoutlaw
we were behind 8000.00 in property taxes which we had our mortgage company pay..our taxes are about 3000.00 a year very high plus we have to pay flood insurance..
  • March 03 2010
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Profile picture for SoCal Engr
My freebie calculator says that comes out to $13.2K/yr in property taxes. That sounds kind of steep, considering. And you say that houses are going for $20K to 30K? What are your tax rates? Or, were you reeeeeeally behind?

One of the reasons I don't like impounds, the servicers are the poster child for Murphy's Law when they start playing with the impounds. Ignoring, for the moment, any question of payment-v-value, you need to find out your effective tax rate and review why you're being asked to pony up at 44%...yikes!
  • March 03 2010
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Profile picture for emilyoutlaw
the reason was they paid our taxes on our home, we were behind in property taxes, but that is a big jump from 800.00 to 1900.00, my house is not worth what we owe on it, house on my block are going for about 30,000 we owe 90,000 on ours.
  • March 03 2010
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Solutions are primarily based on the relationship of your gross income to your mortgage payment plus taxes and insurance --  not property value -- call your lender and demand a review for workout.  You do not have be late usually -- you have to have the need for relief.
  • March 03 2010
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Profile picture for Texas Banker
What is the reason for the 200+% jump in payment??
  • March 03 2010
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