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kmichelle13 · Joined: 08 Jul 2009 Posts: 1 1.39 Dollars($)

I currently have a first and second mortgage and I have been trying to consolidate the loans; however, I can't find a lender willing to assist because I owe more on my home that it's worth.

I will be changing careers and my salary will be less so lowering my payments would be great.

I've contacted a real estate agent and considered doing a short sale; however, I fear the impact it will have on my credit.

Currently, I am not behind on my payments and I have good credit.
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What options do I have?
Is there anything I can do?

jameshogg · Posted: Wed Jul 08, 2009 8:27 pm Post subject:

Hi kmichelle,

You cannot simply get rid of the second mortgage. The second mortgage lender has all the right to collect the dues from you. You can apply for a loan modification with both the lenders and check out if they can reduce your interest rate thereby reducing your payments and increasing the loan term. This will help you in saving your property as well as your credit.

If you go for a short sale, it would reduce your credit score by 75-100 points. However, you would still be responsible for the second mortgage. The second mortgage lender can charge off the mortgage to a third party collection agency.

Thanks

robertsmith2005 · Joined: 22 May 2009 Posts: 338 -0.48 Dollars($)

you are answerable for payment of both the loans. loan modification is the right approach if you want to continue with property.

This will help you catch up by possibly reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem but your net income is less than it was before the default

Jessica · Posted: Fri Jul 10, 2009 5:47 am Post subject:

Hi kmichelle,

I'd like to know how much more you owe on the mortgages as compared to the current value of your home. In case your first mortgage balance doesn't exceed 125% of the home value, you can go for a Home Affordable Refinance program. It'll help you to lower your payments and then you could possible manage both the mortgages. Since you're not behind on your payments, you have a fair chance of getting approved for the program. However, you need to satisfy certain criteria. For instance, your mortgage should be guaranteed by Fannie Mae or Freddie Mac and you should have sufficient income to make payments under the program. For further details, check out a previous discussion on Home Affordable Refinance.

Regards,

Jessica

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How do you get rid of a 2nd Mortgage when you owe more than your home is worth?