Can anyone help us?

coffeeboyJuly 9, 2009

My wife and I are in trouble. We have two commerical buildings with more than 50% equity (good), and it is SBA loan. Our home was purchased for 211,000, and first mortgage at 5%fixed at 160,000. BIG MISTAKE IS OUR HELOC with 50,000 balance adjustable, and payment just doubled to the point we can't pay it. We are not paying a few of our credit cards (we havent' charged in 4 years, but that was our downfall!) We won't be able to make it! Our credit has gone from good to bad, our lender won't combine the heloc with our mortgage, WE CANNOT DECLARE BANKRUPTCY! My wife would probably loose her very good job. If we could only find a way to combine our heloc with our 1st mortgage, or reduce our heloc payment (which they will not do), we would be fine. The huge jump doubling our heloc payment is going to kill us, there is no way we can pay it, any ideas for help....... PLEASE!?

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western_pa_luann

Reduce expenses and/or find a second job.

Can you sell the buildings?

    Bookmark   July 9, 2009 at 9:22AM
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Chemocurl zn5b/6a Indiana

BIG MISTAKE IS OUR HELOC with 50,000 balance adjustable, and payment just doubled to the point we can't pay it.
That just doesn't sound right to have doubled. Might there be a mistake?

What is the length of this loan. What was the interest rate and payment before it adjusted?

What is the interest rate and the amount of the payment now.

I have heard of payments going up when adj rates went up, but never of them doubling. Could you maybe extend the length of the loan anyway?

It seems strange that a lender ever loaned $160K and $50K on a house that was purchased for just $211K...but then there were a lot of bad lending deals made.

I'm curious why you think your wife could lose her very good job.

Sue

    Bookmark   July 9, 2009 at 3:33PM
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coffeeboy

We purchased the home for 211k and put 40k down. The property is valued and even assessed at 240k. We made the huge heloc mistake one year later for 50k. 5 years of interest only for around $250, then raised to just over $500 last month. We have had the commercial buildings listed and for sale for over 6 months. We don't qualify for the mortgage restructure (even though we have a fannie/freddie) since our income is too high. I am working an extra job, and we have cut many items from our budget. Scared to death since we have always been ontime and good up until this year. My wife works for a foundation, any move to garnish or bad posted bankruptcy are reasons to fire.

    Bookmark   July 9, 2009 at 3:56PM
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coffeeboy

The heloc is a 15 year adjustable. Our 1st is a 20 year fixed at 5%. Helocs or second mortgages are not eligible for the great bailout help.

    Bookmark   July 9, 2009 at 4:00PM
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cindyb_va

Assuming I am reading your posts right, you are not upside down with respect to your house.

If the house is worth $240k, that means at sale you would net about $225k after 6% broker commission. Your first mortgage would take about $160k of that, leaving you with $65k; which you can use to pay off your HELOC of $50k and some of your credit card debt (another $15k).

If I were in your shoes, and selling the commercial properties wasn't an option, I'd seriously consider selling the house and renting for a few years to get back on a solid financial track. Keep in mind you might have to pay gains on the property, depending on your tax situation.

It hurts to start over, but sometimes it's necessary.

    Bookmark   July 9, 2009 at 5:29PM
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jane__ny

What area of the country do you live?

    Bookmark   July 9, 2009 at 10:00PM
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fandlil

Could you convert the commercial property to condominium offices and/or stores? Or is there some other way you could get your commercial tenants to help? After all, they too have a stake in this.

    Bookmark   July 9, 2009 at 10:22PM
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breenthumb

You might also get some useful help on the Buying and Selling Homes Forum.

Here is a link that might be useful: Buying and Selling Homes

    Bookmark   July 10, 2009 at 10:17PM
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cmarlin20

I'd continue paying all debt but the HELOC, try to sell now or after missing payments work to get them to adjust the loan. List your house immediately, what state are you in, does your state have recourse loans?
Don't miss your CC payments.
I don't see that you need to file for bankruptcy unless you cannot pay your debt even without the HELOC. .

    Bookmark   July 11, 2009 at 4:49PM
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