Q: We had to get an attorney and file bankruptcy. We are surrendering the house because the bank won't listen to us and try to help us save it. Our problem started when my husband lost his job a year ago. We lost 75 percent of our income and no one seemed to care. We got behind in our debt payments very quickly and were just pouring money into a hole. We stopped foreclosure this July by declaring bankruptcy, but now we have to try and rent another place to live, based on what I make. We did do credit counseling, but it really didn't solve anything. We made arrangements with a couple of the creditors for lesser amounts on payments but even that didn't solve the biggest problem -- keeping the house. We applied for and were denied a loan modification. The entire problem is due to loss of income, and when we talked to our lender's programs, they made us feel like crap for defaulting. We checked out, but were smart enough not to fall for, some of the "save your house" scams and even tried some of the legitimate nonprofit housing counseling agencies. At this point, we are so tired and frustrated that we are giving up and walking away. Before we do, might you have any more suggestions?
A: Not every home can be saved. The current recession has claimed millions of homeowners. They have lost their homes and had their credit histories and credit scores damaged.
If your lender feels that you don't have enough income to make the mortgage payments going forward, or if you have too much income (the way they calculate), then you won't be granted an in-house or government loan modification.
You were able to stop foreclosure by filing for bankruptcy, but that means you're no longer eligible for a loan modification program.
If your husband gets another job and the two of you make even 50 or 60 percent of what you were making before, you might contact your lender and ask for an in-house modification one last time.
Otherwise, you might not be able to save your home. If you can't save your home, you'll need to find a place to move and secure your family, and start rebuilding your financial future.
There are homeowners and attorneys who believe that many loans given by banks during the last several years have flaws in them that are worth challenging. While they may be right for some situations and some loans, you have not raised any issues about your underlying loan. You might be approached by a company that will offer to try to save your home by contesting each and every issue with your lender. Their process may delay the sale of the home, but you could ultimately lose your home. You might be better off moving on and rebuilding your life and credit than prolonging the pain with the existing home.
Ilyce R. Glink's latest book is "Buy, Close, Move In!" Distributed by Tribune Media Services
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