HAMP Process

So, this post may be a bummer, but I’m hoping that its more of an eye-opener for others that may be struggling with keeping their homes in this economy.

In June 2010, I decided that I could no longer afford my condo as I moved back in after a recent break-up. As I have a low-balance (because I bought my home at a low price), the high mortgage payment fluctuates from $872-$945 a month not including assessments. Thats mainly due to an embarrassingly high interest rate at 7.5%. Yes, friends. Do not rub your eyes, I wrote 7.5%.  When interest rates across the country are at a all-time low (around 4.5% in some areas), I’m sitting pretty with a balance of $102,000 and a 7.5% interest rate. Rip my eyes out.

I stopped making payments and waited to see what my mortgage company had in store for me in terms of the foreclosure process. There are a lot of maintenance items that need to be done to the condo that I’d love to get all nitty gritty with and DIY up a storm, but until I know that I will continue to  officially own my condo at a competitive rate…there’s no way I can start any projects. This has been a big reason my blog has turned into a sub-par of what I initially envisioned and also why I’ve been MIA lately.

Anyway, after talking to my mortgage company, they wanted documents and financial information to get the ball rolling on what they could do in terms of working with me. During that time, I took the extra money left over (from not making mortgage payments) to pay off any unsecured debt. I had 6 active credit cards at the time but have reduced that number to having balances on only 2 cards. I feel that the pressure has been a little bit loosened on that area…but I’m desperately trying to eliminate my credit card debt and my 2 personal loans because the monthly payments on those tower around $700 a month alone. And, thats just the minimum.

After reviewing my information, my mortgage company decided to send me a HAMP package (the Obama program) to see if I would qualify for that. While filling out the paper work and sending it in, it will automatically halt the foreclosure process on my condo. If I do not qualify for the HAMP/Obama plan, my mortgage company said they would try to see what else I could qualify for to work with me during this process. I’m hopeful. What I primarily asked for in my plea was for a lower interest rate to be more reflective of today’s competitive rates. I know this can be a long and draining process and I’m up in the air about what I want to do personally with my life. Do I destroy my credit and try to walk away? Or do I stick it out with a place that needs ALOT of work and money put into it … which I do not have.

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3 thoughts on “HAMP Process

  1. First off, I’m impressed that you were so open and candid about this stuff. I know you’re not the only one going through this. I’ve had some embarrassing interest rates in my past lives…trust me. 🙂

    Here’s a thought on walking away…just in my newer, post-credit-card-debt opinion. If you walk away and “destroy” your credit, it means you can’t get in more debt for quite some time. Yes, you can’t finance a car. Or buy a house for a while. But there are some economists who don’t think that owning property is such a good investment after all, as they point out that you kind of get stuck. This may be food for thought: http://www.iwillteachyoutoberich.com/buying-a-house/

    Anyway, if you walk away and move somewhere more affordable, then work on eliminating your debt, enjoying a less stressful life, and building an emergency fund for a few years, then it just might be worth it. Rather than trying to make ends meet while doing major work on a place that’s already become stressful to “own.”

    Again – just my thought. I’m sure there are a ton of differing opinions. Hang in there!!!

    • Thanks Jen! That’s amazing advice and I definitely appreciate your comments. It is a difficult time and very confusing. I’m just scared to take that leap and walk away but yes, I completely agree that the credit report/foreclosure on my record can definitely help me get focused and stay away from unnecessary debt! Thanks again for the article 🙂

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