Need advice on really weird situation....please

STLUCIELADY · Joined: 20 Oct 2007 Posts: 1 2.08 Dollars($)

I have a weird situation. Over 5 years ago we sold our house in New Jersey and moved to Florida. Somehow our second mortgage through GMAC did not get paid off. Didn't notice it at the time because we didn't go to closing. It was a mail away. We had been living in FL for about 8 months by that time and had totally divorced ourselves from the situation. Anyway, we got the first bill and thought it was nothing. Next bill came and we pulled out the closing papers and realized then that it had never been paid off. By then we didn't have the full amount to pay them so we continued to pay the monthly bills figuring sooner or later we would be able to pay them back. So for 5 years I have been paying a mortgage on a property I don't own. No biggie, I owed it so I kept paying it. Well now we are really having a hard time paying our mortgages and that one is the worst because the interest rate is over 10% now. I'm not sure what to do. I know I owe it and I don't want to get out of paying it. That's not my question. I can not refinance any of our mortgages because we don't have any equity left since the atrocious downturn in housing. We have a mortgage on our home and also a mortgage on a home my oldest daughter lives in. She has recently come down with Lupus and needs all the help we can give her so we can not sell that property, at least not yet. My husband and I had jobs having to do with the housing market so our income has been reduced by 90%, so we couldn't refinance even if we had equity.

If I notify GMAC that we can not continue to pay that mortgage at the rate that it is at, do you think they will refinance to a lower rate or will some crazy bell go off and they will want all the money at once at ruin our credit. The one thing we have left is our great credit. Is their anything criminal in what we did? Can we get in trouble in any way? I'm so afraid to bring it to their attention but it is going to bury us soon and I don't want to go into default on our bills. Any help is greatly appreciated!!!! Sorry about the long post.

livinginnky · Posted: Sun Oct 21, 2007 8:06 pm Post subject:

Guest 0.10 Dollars($)

Hi,

I think it will be best to contact GMAC immediately and clear up your situation. You can talk to them about some alternative repayment options.

Caron

Hi Stlucielady,

Welcome to our forums.

First of all, if you have sold the property, why didn't you inform GMac about it. And moreover, you could have used the sale proceeds to pay off the mortgage. GMac may not be knowing about the sale or else they should have called the loan due immediately. They might now consider it a fraud. You may have done it unknowingly but why would they believe you. after all, it's business and there are some rules which lenders follow and expect borrowers to follow.

I may sound a bit harsh but it's reality. Either you pay off the mortgage in full or else GMac might bring about a case too. And, you cannot refinance also because the same property needs to be used. But you have already sold it. Immediately contact Gmac and do consult a mortgage attorney to be informed of the legal ramifications of this issue.

Good luck

0.10 Dollars($)

Like I said in my post. It was a mailaway. Everything was done with lawyers and realtors and title companies. I assumed everything was being taken care of. WE also had to escrow a large amount to the buyer for an open permit so it all seemed ok, bottom dollar-wise. I am not saying it wasn't a mistake, it was. Totally unintentional. Thought everything was fine. I never even saw the documents. My husband had a POA for me for that closing and I had a POA for him for the Florida Closing. Sadly, I'm the more detailed one. Anyway, I didn't even know you could close on a property without everything getting paid off and all estoppel letters addressed. 2 months later, we didn't have that balance anymore to pay off the loan. That's when we found out about the balance not being paid off. Not a bad person here. Been trying to pay off this loan for 5 years but of course since it is a credit type line, I think we have only paid off about $300 in principal total.

Please do not dwell on the past. What's done is done. I need help on the future. If anyone knows real answers I would be grateful. Maybe someone has run into this situation before or has some experience with someone they know. All information welcome. Thank you again.

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.80 Dollars($)

Hello Stlucielady,

There's one option that might help you. If you can take a cash-out refinance against your present home and pay off the second mortgage with GMac.

You have to see whether the excess amount of this cash-out is sufficient to pay off the entire outstanding balance or not.

Caron

I do understand it's not intentional and that's why I said that GMac might consider it as fraud. What I wanted to say was you could have been a bit more careful that's all. My intention was not to criticise you actually.

I'm just a bit concerned as to what action GMac may think upon taking once they come to know about the sale. I think it's better if you can make arrangements so that you pay off the second mortgage asap and get out of it. Do you have any savings or investment returns which you can use currently? It is not wise to use up your savings but at this point of time, there aren't many ways to get out of this loan, isn't it?

By the way, do you have any life insurance policy? probably you can surrender the policy to the insurer and get paid till a certain value. This is known as life settlement service and to avil this, You need to contact a life settlement broker. You can use the cash value to repay your loan.

Currently these are the options I can think of. If I find out any other options, I shall definitely post it here.

Good luck

livinginnky · Posted: Mon Oct 22, 2007 10:03 am Post subject:

0.10 Dollars($)

Thank you for trying to help. Wish I did have the equity to cash out on my home but I have lost almost $100k in equity in the last 2 years. Now I am barely upright in my primary loan. No room for an equity loan left. Wish I could find another way. With the 90% decrease in our yearly income, our housing costs are now over 75% of our income. Our unemployment rate is the highest in the state so getting a job that pays more than I'm making now is not an option. Just trying to hold things together until one of our properties will sell and relieve some of the pressure. I guess I am just between a rock and a hard place. I thought maybe the bank would do one of those 1% interest rate loans like they do for short sales. That was the best case scenario. I guess I shouldn't even open that Pandora's box. Crying or Very sad

Thanks again.

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.80 Dollars($)

Hello Stlucielady,

You should consult an attorney immediately and also talk to GMac as early as possible.

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