Hello.
We bought our house 2 years ago - we live in California - land of high cost everything. We bought our home for $317k, and financed 100%. (I am sure you can see where this is going).
At the time we were looking for a bigger place for our family, and weren't able to find one to rent (we had 5 children, now have 6 - and another on the way).. we looked into home ownership thinking there was no way, we wanted more education on what we needed to do to make ourselves ready - to get a grasp on what we needed, etc. Well, welcome to the world of the loan sharks... and the sub prime market! My fiancee has some derogatory stuff (old medical collections) - and I had 2 things that are now gone (they were about to expire)..
We found an all too eager realtor, who we actually liked who we thought was really in it for us.. and a mortgage broker he referred us to. We got into a 40 year mortgage with a fixed 2 year rate, then an ARM for our 1st mortgage, (the second is fixed, but with a horrendous interest rate) with the assurance from all involved that it would be SO easy and NO problem to refinance before it EVER went adjustable! ANd we'll have such a better rate, what with our payments always being on time - who wouldn't want to refi us!?
Yeah well.... now the market has dropped - which doesn't concern us as much as everything else - we're now upside down on our loan but never planned to move - we really plan to stay in this home forever. Except, that we can not refinance it - a couple of reasons. 1. the value of similar homes in the area is about 40k less than we bought ours for... 2. the new lending standards... 3. We have a high debt to income ratio - but all payments are timely and current. 4. we have little savings for any closing costs or fees.
We were notified by mail that we received yesterday, our mortgage is now being adjusted. When we were looking into refinancing we were told that most companies aren't actually adjusting the rates right now due to the foreclosure rates and new legislation... well no one told our company that.. Our payment is going up $180... beginning in December (Merry Christmas!).
I had thought about filing bankruptcy on my credit card debts in order to have more $ to go to the house, though I am guessing this will probably drive our rate up further - I admit I don't know how this works really.
I did contact the Mortgage company, they took some info from me and said they'd see IF they can help... they will 'notify us in 30 days'... well nice. Thanks! We're struggling but making our current payments OK... our mortgage is already nearly half of our income! Yeesh
(we have 6 children 1 with special needs [well, really 2 but one is undiagnosed].. and with a family as large as ours there are not really other options)
I have contaced the HOPE program, but am having trouble getting through due to so many people calling - I keep giving them my info but then getting disconnected. I had also contacted NACA re: their home save? program... i have to find some documents to get to them.
Any advice or help is greatly appreciated.
We really really don't want to lose our home, I'm scared and am not really sure what to do.
