I live in Tempe, AZ in a home I purchased in 2005. I am current on my primary mortgage ($190K @ 7% /30 yrs) and my 2nd Mtg (roughly $35K which was used for repairs and renovation at the time of purchase). Home value is in the $150K range, renting it out is not appealing given the low rent rates in the area.
My mother turns 60 in a month, and was diagnosed with ALS (Lou Gehrig’s disease) in 2007. At this point she requires 24 hr care and is only able to control movement of her eyes to communicate with us via a specialized computer. She is on a permanent ventilator, feeding tube and catheter. Her small amount of income is roughly 1/3rd of her monthly care costs, and her savings (which is filling the gaps in cost of care) will be depleted in 5 months. It is estimated that she has between 2 and 4 years to live. My single utmost concern at this point is her safety, comfort and quality of life in these twilight hours of her life.
I’m unable to come up with any solution other than my Wife and I leaving our home behind to move-in and care for her full-time. By combining our incomes we can just barely cover the health care costs and costs of living. Her home has been modified to accommodate her, otherwise I’d look at moving her into my home to care for her. Putting her in a home is not an option, period.
I’ve heard the banks (BofA serviced, owned by Freddie Mac in my case) won’t even talk to me about short sale options until I’m several months delinquent in payments. I’d like advice on what my options may be and where to start.
Thanks in advance and apologies for the long-winded question.
I highly recommend you call your lender to explain the situation fully. I know many of them have the rep that they don’t care but often they do and often they will help. Have documentation available.
You can do a short sale regardless of whether you are behind or not…
Other options like a loan modification might be harder if you are not behind but sometimes you can get a sympathetic ear even if you are not behind. Sometimes being a week late can help too but obviously there is a cost to FICO.
I think deed in lieu would not be an option because of the 2 mortgages.
Be blunt and let them know that you are prepared to just walk away from the house to go care for your mother. See what happens.
Thanks for the info and advice. I’ve begun pulling together the documentation to support the approaching hardship and changes in living/working arrangements that caring for my Mom will require, and I’ll prepare to present that to BofA.
I’m hoping for a smooth SS process, but I’m also prepared to walk away from my home to care for my Mom if necessary.
Is it feasible to even hope that I might be able to negotiate payment in full on my 2nd mtg as a component of the SS? I’ve heard the bank will likely exempt that 2nd and require I continue to pay on it.
There is very little that is hard and fast, so try to forget about the various things you have “heard”.
Depends who the investor is for your 2nd mortgage. If it is the same investor (not servicer) as your 1st, you have a better chance of working out a good deal on a loan mod.
Remember if you agree to short sell your house to someone else, you will not be handling the negotiations. A Realtor or the investor or a negotiator will be. Make sure you tell that person that you want to be be released from the debt as a condition of short sale approval. Most lenders will do this. But depends if it is a HELOC or other 2nd.
If you decide to go SS, check to see if it qualifies under HAFA. THat would be better for you.