Homeowner with credit shot to all hell

[Mrs Ambitious]

What do I do, we are a young couple with 2 children - ambitious, we purchased a home back in 2002. Been with the same mortgage company since then but all hell broke loose; my husband experienced a couple job changes and layoffs, I too was laid off and out of work for a period of months in 2004. When we saw trouble ahead we contacted one of those consolidation programs who claim to have connections with 1000s of companies to take all of our credit cards negotiate and create one easy payment. When we started to receive correspondence demanding payment in full for the accounts, we realized the so-called “credit-help” company never secured agreements for the proposals and was paying less than the minimums and also paying late – we paid them on THEIR schedule, the 15th of each month. My credit is worse now than when I went on for help and those credit cards are now in judgment – I’m being sued left and right. I would love to work out something with them, but on a card with a $5000 balance – they’d say OK we’ll accept $3500 but you have 30 days to get it to us (like I have that money just sitting around).

I owe about $155K on my home, comparable homes are being sold between $300-329K – With 20K I can contact all of these credit card companies, square off my debts and do home repairs to help increase the value – I DO NOT want to go through a company to work out deals with these companies for my cards and student loans – for the most part they are unscrupulous cheaters who do backend deals for discounts and would make me still pay the full amount to them. I can’t get any money out on my home, my credit is pretty bad (470 last I checked) – when I lost my job I had to live off of $400 a week and still pay for childcare so I can be available to go on job interviews. I ran around trying to get help and assistance and was turned away because I was a homeowner…apparently had I been a renter I would qualify for utilities payment help etc. I’m still trying to play catch-up – I was paying late and the BS with the credit consolidation company was the straw that broke the camels back. Understanding the value of my home and that I only needed about $20K to straighten up – I looked around for help. I was turned away left and right, they don’t care about your sob story and why you couldn’t pay bills on time. The only people that stated they could help were "devils" that were out to try to get me to sell my home to them at less than fair-market value, get me to transfer ownership or some kind of explosive rate loan with an unknown financial institution where none of your payment goes to principal and will ultimately lead to me loosing the roof over my head anyways. It's so sad how these people present themselves as professionals, try to get to know you and your family, smile in your face etc and they are holding your hand trying to lead you into the WORST possible thing seeking to capitalize off your vulnerable position. Most of the companies that target bad credit homeowners are crooks.

Some banks said get the rate up to 550 and they can help, pay off a few bills first. Duh, if I was able to do that I wouldn’t be asking you for the loan. I’d rather have my mortgage stay at the status quo and have a separate bill for about $500 a month to go toward cleaning up the past I don't want to bundle it into my 30 mortagage and have another company handle workout options with credit card companies on my behalf. Brokers all claim re-fi is the best route but if my credit is bad, I don’t want to re-finance my home at whatever crazy rate I would get. I’d rather get bad rate equity or personal loan. A medium to high rate interest loan for 10 or 20K is more appealing to me than the thought of a 200K-300K loan at a high rate.

I am stuck with this burden over my head…debt, equity I cannot access and worse yet – my house can use a new roof, windows. This is so frustrating - If I wasn't a homeowner this credit companies would have left me alone already - they see you have a big asset and they bring in lawyers, they want to sue (even though they charged off the account and got paid via insurance), they sell these account at pennies on the dollar and have companies call to harrass you for the balance in full - as if you have the money sitting around in the bank. What do you guys think I should do to get it together?

[cannondale]

This probably isn't the advice you're looking for but take a look at daveramsey.com. He has a daily radio show dealing with similar situations, he also has published several best sellers dealing with this kind of problem. Hope this helps.

[malcolan]

...if I were you.

Your problem, to me, is not as bad as it seems. Your situation is unfortunate but it's definitely not the end of the world.

Are your mortgage payments current? This is most important, if you have to let some other bills go, fine, but don't skip any mortgage payments.

If all you need is $20k, then it shouldn't be that difficult. You said that comparable houses in the neighborhood are worth approximately 300k. What about yours? Call a local real estate agent and tell them that you are thinking about selling your home and would like a CMA performed on your property (CMA stands for comparitive market analysis). This could most likely be done over the phone to get a rough idea of the value.

Instead of refinancing, you need to look into a HELOC. This stands for Home Equity Line of Credit.

Like it or not, your home is your best bet to get a loan. Basically, you will be creating a note against the equity of your house, which is a pretty safe investment to a bank, regardless of your credit score. Loans secured by real estate are the best loans there are. They have their guidelines, of course, and one of the most important is the LTV. This stands for Loan to Value. In other words, if you only owe 155K, but the house is worth 300K, it would be safe to loan you the 20K because if they have to forclose on you due to no payment, they could certainly recoup their money. That's why it's important to find out the value of your home before you inquire about a Home Equity Loan.

Does that make sense?

Based on the information you have given, my guess would be that you could get a loan for $20,000 with an interest rate between 9 and 9.5%. Your monthly payments would be around $170 per month for 25 years. I assume that the house is in New Jersey. That state doesn't have any prepayment penalties, so...you said you could afford to pay $500 per month. What you do is pay the $170 (which is for principle and interest) and pay an extra $330 towards the principal. If you do this consistently, your loan will be paid off in 5 years.

Voila. Problem solved.

If you want to look into this further (I suggest that you at least try), go to this link.

http://www.bankofamerica.com/loansandhomes/index.cfm?template=learn_home_equity

On that page, click on the link which is on the upper right side that says "Chat online now"

Ask for Chris in Home Equity.

Chat with Chris, tell him that Andy sent you, and you are on your way.

It won't cost you a penny to apply for the loan, and Chris can help you with that.

I hope that this helps. If it doesn't, post here again and I might have another way to go about this.

On a side note, what cannondale said about going to DaveRamsey.com was great. It's a fantastic site and he certainly can be trusted in these kind of things.

He has a radio show as well, you might find it locally on a Christian radio station, or on both satellite radios (Sirius and XM).

:cool:

[hazman6969]

Home Equity loan is you best way out. Dont wait to much longer or you will be forced by the courts to sell your home to pay debts. good luck!



http://www.********.com/?2895339

[jstuver]

actually, credit repair is another viable option.

[aaron]

But watch out for credit repair scams (http://www.expertlaw.com/library/consumer/credit_repair.html). I tend to agree with the suggestions that debt consolidation (http://www.expertlaw.com/library/finance/debt_consolidation.html), perhaps through a home refinance (http://www.expertlaw.com/library/finance/refinance_home.html), is probably the best approach.

[nationwideloans]

So how did everything work out? Did you get the help that oyu needed?

[Stresspickle]

did you find some help?

[Helper]

Do you have really bad credit card debit??? If you need help please call 651-212-1851. I know a female friend that can help clear all your debit!!!

[TerryDee]

What do I do, we are a young couple with 2 children - ambitious, we purchased a home back in 2002. Been with the same mortgage company since then but all hell broke loose; my husband experienced a couple job changes and layoffs, I too was laid off and out of work for a period of months in 2004. When we saw trouble ahead we contacted one of those consolidation programs who claim to have connections with 1000s of companies to take all of our credit cards negotiate and create one easy payment. When we started to receive correspondence demanding payment in full for the accounts, we realized the so-called “credit-help” company never secured agreements for the proposals and was paying less than the minimums and also paying late – we paid them on THEIR schedule, the 15th of each month. My credit is worse now than when I went on for help and those credit cards are now in judgment – I’m being sued left and right. I would love to work out something with them, but on a card with a $5000 balance – they’d say OK we’ll accept $3500 but you have 30 days to get it to us (like I have that money just sitting around).

I owe about $155K on my home, comparable homes are being sold between $300-329K – With 20K I can contact all of these credit card companies, square off my debts and do home repairs to help increase the value – I DO NOT want to go through a company to work out deals with these companies for my cards and student loans – for the most part they are unscrupulous cheaters who do backend deals for discounts and would make me still pay the full amount to them. I can’t get any money out on my home, my credit is pretty bad (470 last I checked) – when I lost my job I had to live off of $400 a week and still pay for childcare so I can be available to go on job interviews. I ran around trying to get help and assistance and was turned away because I was a homeowner…apparently had I been a renter I would qualify for utilities payment help etc. I’m still trying to play catch-up – I was paying late and the BS with the credit consolidation company was the straw that broke the camels back. Understanding the value of my home and that I only needed about $20K to straighten up – I looked around for help. I was turned away left and right, they don’t care about your sob story and why you couldn’t pay bills on time. The only people that stated they could help were "devils" that were out to try to get me to sell my home to them at less than fair-market value, get me to transfer ownership or some kind of explosive rate loan with an unknown financial institution where none of your payment goes to principal and will ultimately lead to me loosing the roof over my head anyways. It's so sad how these people present themselves as professionals, try to get to know you and your family, smile in your face etc and they are holding your hand trying to lead you into the WORST possible thing seeking to capitalize off your vulnerable position. Most of the companies that target bad credit homeowners are crooks.

Some banks said get the rate up to 550 and they can help, pay off a few bills first. Duh, if I was able to do that I wouldn’t be asking you for the loan. I’d rather have my mortgage stay at the status quo and have a separate bill for about $500 a month to go toward cleaning up the past I don't want to bundle it into my 30 mortagage and have another company handle workout options with credit card companies on my behalf. Brokers all claim re-fi is the best route but if my credit is bad, I don’t want to re-finance my home at whatever crazy rate I would get. I’d rather get bad rate equity or personal loan. A medium to high rate interest loan for 10 or 20K is more appealing to me than the thought of a 200K-300K loan at a high rate.

I am stuck with this burden over my head…debt, equity I cannot access and worse yet – my house can use a new roof, windows. This is so frustrating - If I wasn't a homeowner this credit companies would have left me alone already - they see you have a big asset and they bring in lawyers, they want to sue (even though they charged off the account and got paid via insurance), they sell these account at pennies on the dollar and have companies call to harrass you for the balance in full - as if you have the money sitting around in the bank. What do you guys think I should do to get it together?
If its not too late, feel free to contact me for a confidentialN No-cost, NO obligation consulatation. I have over 20 working years experience in the Real Estate and Mortgage Industry. I "SPECIALIZE" in assisting the "credit-challenged" borrower.
Terry
Midwest Equity Mortgage
MAKING DREAM LOANS FOR DREAM HOMES
816 228 2372

[Paulxps]

Call Trinity Credit at 888-NOW-REPAIR They will wipe your credit clean of negatives. I used them I went from a 490 to a 600 in 10 months, I didnt care about the waiting time, but the sucess rate was correct. Its a one time cost.

[athiessen]

Greetings Mrs. Ambitious. I don't mean to be derisionary, but the advice I am reading attached in your post is not the most helpful for this situation. I am a lender located in Kew Gardens, Queens. I can refinance you house as long as your credit score is 400 or higher. This is a new program in New York City which I just recieved about 10 days ago. Any credit history is ok, bankruptsy is ok, foreclosure is ok. There is now cash-out limit and from what you wrote it looks like we can get you somewhere in the area of 50K to 100K out of your home's value. You can pay off your other debts and have money to make your mortgage payments while you get back on your feet. It is the best second-chance program I have ever seen. We can ignore all judgements and liens...they will be your responsibility after you take the cash out of your home. Give me a call and I can explain the program to you in more detail. 917-331-1384. My name is Adam. And you are correct...most of the people in my line of work are crooks. I am not. Give me a chance to show you.

[athiessen]

And by the way Mrs. Ambitious...Yes the rate will be a little high...about 10%. You will be able to refinance for a lower rate after 6mo. to a year if you pay down your other debts and keep your mortgage payments current with the cash-out and therefore raise your score. Don't believe anyone claiming a quick fix. These rapid-rescore techqniques will red-flag your credit after creditors finish their investigations. If you want only 20K, that is what we will ask for. I will not charge you anything, I only get paid by the bank when they provide the loan. Stay with a conventional path. I feel a little like I am fighting an uphill battle making such promises with the experiences you've had with other lenders. I am a high school physics teacher in the Bronx for the first hours of my day if that helps (that is if it still means something about one's character to be a teacher these days). Have a great day and I hope to hear from you soon. This program is going to change a lot of lives.

[athiessen]

One more thing Mrs. Ambitious...it is not necessary for you or your husband to be currently employed to get this loan...if you prefer anonimity...I can be reached at adam@callme4home.com

Adam

[mnow28]

Adam,

I am a Mortgage Banker in Ohio and I am curious to know what Lender is doing the program you described above... I know most sub 500 score programs come from "Hard Money" lenders...I DO NOT do loans in NY, so your secret is safe hehehe...The reason I ask is that I have been coming across a number of clients int he 400s and really do not want to put them into hard money programs....Is your program only in NY? Is it a City or State program? I know LO's hate to share thier secrets, but this one would really help alot of people... Thanks in advance...Dave

[athiessen]

Make sure if you choose to go with a HELOC, find out what sort of action can be taken against you if you default. I would not suggest putting up your home for 20K...if you're going to use your home as collateral...take as much as you can and have a nice cushion. My first investment home I didn't have much reserve to speak of. This was not a happy first six months for me.

Adam

And Dave...give me some time to locate any associated programs my bank may have out there. They are a small and growing program. Maybe you could give me a few forclosures in NY as return if you have any such files:-)

[mnow28]

Adam,

Thanks for the help....Its greatly appreciated!!!!

As far as deal in NY go, no problem. I dont come accross to many, but when I do, they are yours.

Thanks again,

Dave

[mnow28]

Adam,

One more thing, if your company can do wholesale or corr business, let me know. This way you get paid too.

Dave