Wednesday, February 24, 2010

Financial Woes...

I've been mulling over whether or not to chat about this on the web but I feel at peace with it now and I hope that my issues might help someone else going through the same thing.

When we bought our home in 2007, we thought we were getting a great deal. A beautiful, spacious home right across the street from a park for under $300K, which was a steal back then. So we decided to bite the bullet, and signed our name to loan documents for a 7/1 IO ARM first mortgage(mortgage-speak for an adjustable rate mortgage that is fixed for only the first 7 years and carries an interest-only payment for that term as well)and a 30 year fixed 2nd mortgage to cover the remaining 20% of the purchase price. At the time, that was a very safe ARM-style loan as the market was at an all-time high as far as value and we just "assumed," like so many others, that we'd wait a few years, build up a little equity and then refinance the house into a traditional 30 year fixed or sell it and buy a new home.

Fast forward to about a year ago when we finally agreed that the house would probably NEVER be worth what we paid for it and that we could and should be renting a much larger and nicer home in a much better school district for the kids for what we were paying for our current mortgage payment. We took the logical first step and called our mortgage company about our available options and were pretty much told to get the hell of the phone and that there was no help, what so ever available because "we made too much money." We make ok money, but nowhere near an amount that I would call "too much" for a family of 4 in California.

I'm condensing this quite a bit because I don't want to share my guts completely, but this was an EXTREMELY difficult agreement for my husband and I to come to as we'd always made every payment on time or early, but we knew that we'd lose the house, whether now or when the rate started adjusting in a year. We made our final payment Oct 2009 and starting looking for an attorney to retain as we had to claim Bankruptcy (in addition to eventually heading into foreclosure and losing the house)to protect ourselves from retaliation from the bank due to us getting a 1st and 2nd mortgage when we bought the house and it's a tactic to stall the bank from filing an NOD (notice of default) and beginning the Foreclosure process... We are now several months into all of this and it's only become slightly easier for me to say the words foreclosure, bankruptcy, and the like. I know that there are people out there who may judge those who've lost or are losing their homes and it really bothers me. We never intended to have to go this route nor did we want to tarnish our virtually perfect credit but we had to make a really tough choice for the better of our family.

To Be Continued...

No comments: