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Guest

I purchased my first home and I was laid off about 8 months later. My mortgage company put my payments in forbearance during this time. I signed a contract with the terms but I am not sure if it involved any thing that will prevent me from getting out of it. When I gained employment again the Mortg. Company established a rerpayment plan for the amount in arrears in addition to my current mortgage. Then I find out that I had a 2 yr ARM that matures this month and my payments are certain to go up. I am already paying an additional $200+ per month in arrears, I cannot afford another increase in my payments. I cannot refinance due to my late payments. However, I have two other relatives that are willing to do whatever it takes, refinance, quick deed, etc to help me keep my house. Any suggestions on how to proceed. Thank you.

Guest

Is any one your relatives willing to take over the loan? Then you can request the lender to allow you to transfer the loan. This process is called novation.

Caron

Hi MLB,

Welcome to our forums.

The forbearance is an alternative repayment plan which the lender formulates so that a borrower can pay off the home loan comfortably within a certain time period. But if you are not comfortable with the plan, then you should inform the lender. May be he can improve the plan and make it suitable for you.

You have mentioned that you will not be able to refinance. But if you can get a cash-out refinance loan and that too, a fixed rate loan, you can pay off the existing loan and also get some extra cash. The additional amount will help you to cover the late payments and any penalty involved in refinancing.

I personally feel you should talk to the lender about refinancing and if he is not willing to provide you with such a program, you can look out for another lender. I understand you will have to pay a certain amount of loan costs for the refinance but then you need to save your home.

You may have thought of doing a quit claim. But that will only transfer your home to the relatives and not the loan. So, if you wish to get rid of the loan, think about options like Cash-out Refinancing or novation.

Feel free to share with us what the lender says. This will help the community to come up with some more suggestions.

Thanks,

Caron.

adonis · Posted: Wed Jan 10, 2007 4:54 am Post subject:

MLB, do you have any mortgage insurance policy? If yes, then you can request your lender to get back his money from the funds obtained through the policy.

wablola · Posted: Mon Jan 15, 2007 11:45 am Post subject:

The repayment of the months missed is key.

Here are some options:

- relatives can help with payment
- refinance out of the 2/28 loan, and get into something more stable
- if refinance, make sure you find out the LTV. Make sure the current loan is not upside-down.
- adding another borrower may be somewhat of an obstacle. Lenders will want to make sure the new borrower is going to live in there as primary property. Although, there are ways around it.

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