The banks are still encouraging people to borrow money they can't afford to pay back.

[notadmblnd]

My mortgage company called me last week and asked if I would be interested in refinancing. I told them yes since I'm about to lose approx 1/2 of my income in April and will have trouble making the payments since I have been unable to find employment.

To make a long story short, apparently they won't re finance me because I'm upside down in my mortgage, however, they will give me a 20,000 personal loan to pay off my less than 5,000 of debt. I asked them how this was going to help me since I won't be able to make my mortgage come April. I told the girl I'd call her back, but I'm thinking isn't this the kind of behavior by the banks that got us into this mess to begin with?

In all honesty, I'm half tempted to take the money, buy a repossessed double wide, pay cash, put it in a relatives name and walk away from it all? I was told that they can't rework my mortgage or file for hardship until I have fallen behind and ruined my credit. What should I do?

[Sadie5]

1. Your idea has merit

This is what a bunch of other folks have done. In over your head, better to get out now. The banks will do nothing for the little guy.

[notadmblnd]

3. I wasn't in over my head.

I've paid every payment on time for over 10 years. I'm losing half of my income and have been unable to gain employment. I only need to make about 10 dollars an hour to cover the loss and I need no benefits as my deceased husband employer provides for my medical, dental and visual needs. I contacted MSHDA (Michigan's foreclosure prevention program) to see if they can help. But if they can't do anything for me... what other choice do I have?

[napi21]

2. I don't know who holds your mtg. but the bankers at the hearing yesterday

agreed they will put a moratorium on foreclosures until Geithner unveils his housing plan. Barney Frank believes they will stick to their promise. There's supposed to be a plan to help people just like you who can't get a refi because they're upside down.

[notadmblnd]

6. I filled out paperwork for Michigan's foreclosure prevention program

I'm hoping they'll contact me and be able to help.

[lunatica]

4. But when they apply the banks turn them down

I tried with my mortgage company to see if they would give me the loan so I could reduce my debts. First they said it would cost me $10,000 in points to get a $10,000 loan. Of course I turned it down at this point. So far this had only been a conversation over the phone. Soon after I received a letter saying that I had a credit rating of 722, which I gather is good, but they also said I didn't qualify for the loan. I guess I don't get paid enough now, or at some point in my sordid past I was late on a payment. It was kind of vague.

They offer but then turn you down. Probably because they have to prove they're trying so President Obama doesn't take away their bonuses.

[notadmblnd]

11. I can pick up the 20,000 this afternoon if I want

But this will just make my situation worse if I don't find employment in the next couple of months. If I were use it to pay off my other debt and the rest to continue making my mortgage payments while I looking for work, it could stave off foreclosure for a few months.

[lunatica]

19. Isn't there going to be a moratorium on foreclosures?

Maybe you'll be able to keep your home without going further into debt. Between a moratorium on foreclosures and the fact that if your original mortgage company sold your mortgage to someone else which gives you the right to stay in your home, you may actually stave off any foreclosure.

[notadmblnd]

20. I don't know enough about it, but I hope you're right.

[JoDog]

14. A credit score

of 722 is extremely good in this economy.

[lunatica]

23. I've certainly been good about credit card payments

So I should have a good score. My thought is that they're just pretending to give credit but that they're making it impossible yet they can still claim to be trying to loan money.

[KharmaTrain]

5. See If You Can Find Out Who The REAL Mortgage Holder Is...

So many loans have been bundled and rebundled your mortgage company not have clear control of your title. Now why would they pitch you on a re-fi if they should have already known your financial situation? Maybe cause they wanted to rope you into the personal loan, along with all the fees attached to it. Fact is they don't care about your mortgage right now...you're future business...if you do get foreclosed (which I personally wish not to happen), but right now, maybe they can rope you in on extra fees and a "rescheduled" debt...money they need now to cover their large shortfalls.

Now, I'm curious...did they quote you a rate on either the mortgage or the loan? No need to reply, but curious to see if those were fixed rate or yet another time bomb.

Cheers...

[notadmblnd]

7. No, they didn't quote me a rate on either the mortgage or the personal loan.

Household Finance was the original company that financed the mortgage. Beneficial now services(?) it. I can tell you that his was originated in the 90's when interest rates were very high (11.95). If I could get the balanced refinanced at a lower rate (say 5%), there wouldn't be a need to take anything off the principle. My credit score is 713 which I think is pretty good.

[Blue Diadem]

9. That's the same company we have.

Parent company is HSBC who holds our mortgage.

[KharmaTrain]

12. The '05 Bankruptcy Bill Has Been A Real Disaster

IMHO, it's what triggered the collapse as it took the last leash off the banks...allowed them to jack up interest rates without any real cause and opened the door on a ton of sub prime and "no doc" loans. It legalized predatory lending and the banks got fat on the "juice" of those higher rates.

It gauls me no end that this company is trying to rope you into more debt and obligation...especially considering your good credit and situation, but are so greedy they see a chance to make a short term buck to cover their asses and leave you to and the taxpayers to fend for themselves.

I'm hoping Treasury and other departments put the screws to the lenders...force them into good faith renegotiations to prevent people from losing their homes. A foreclosure moritorium would be a real good thing right now.

Here's hoping the best...we're all adrift right now...

[notadmblnd]

13. To me they're committing a fraud. They know that in two months I won't be able to pay

I told them my situation up front. How an they operate this scam and not be liable. How can they hold me responsible to repay the debt if they give me the money knowing I can't afford to pay it back?

[KharmaTrain]

15. It's Outright Shameful...Hope Others Are Seeing This As Well

These goons that run the large banks know their days are numbered and are making it where they can while they can. The damn thing is that this is very legal. There's a good chance your morgage company may not be around in two months either...and they're grabbing anything they can.

Honestly I'm surprised how brazen some of these companies have gotten. Not long ago I spoke with a loan officer at a local bank and he was blunt honest that you'd need a substantial colateral for him to sign off on any loan right now. But then, the big companies don't care and I'm sure you read the thread about the son of a deceased lady getting called to pay off her debts...the gloves are off, the last chance to make a quick buck is here.

[notadmblnd]

16. I read it. Before my husband died, he co-signed a car note for his neice

She defaulted just as I told him she would (had a big argument over this). They tried to collect from me and I told them to go to hell. Never heard from them again.

[Blue Diadem]

8. We ran into the same thing.

Sometime in Dec., DH had received a call from our mortgage company offering a refinance. It turned out the same way, they wouldn't refinance us but they offered to loan us thousands of dollars. It was a WTF moment.

We're waiting right now on hearing back from the bank for a loan modification that DH asked for a few weeks ago due to medical bills and our increased insurance costs. They told him that we fit the criteria but that it will take some time for them to review everything because there is a backlog of requests. Since then, he was laid off.

[rucky]

10. There's an FHA program for people upside-down...

Instead of them waiting for you to default, find someone who offers this:

http://www.fha.com/fha_secure.cfm

[JoDog]

17. One major question, notadmblnd

Do you have any other secured debts (like a car)? How about revolving, unsecured debts that you are making payments on (credit cards)? Would stopping payments on the credit cards help you keep the mortgage current?

Right now, it may not be a bad idea to get a free consult with a bankruptcy attorney or 2. They can take a look at your entire situation and advise you on what to do. Then, you can develop a plan for either keeping the house or taking that loan and walking away. Personally, I would consider stopping all payment on unsecured loans to keep the mortgage and/or car loans current. Depending on your level of debt, it will probably be easier to cut a deal and settle the credit card debt later.

I'm not saying you are in a bankruptcy situation right now, but talking with a professional now may help keep you out of it. If not, you will have several months to do some pre-planning to make it easier.

Frankly, it doesn't seem to matter if you're credit is wrecked or not--no one is giving new loans. Someone upthread mentioned he has a 722 credit score, which is extremely good, but still isn't eligible.

[notadmblnd]

18. My car is paid for. I have approx 5,000 in unsecured debt

The total amount of the payments I have made over the past 10 years has been more than double the amount of the original mortgage.

And no, payments on my unsecured debt add up to about 120.00 a month if I don't pay extra (which is what I normally do). Since my husband died and I lost my job, we live on 1400.00 SS survivors benefits for my son, 1400.00 for me and 595.00 pension. My son will turn 16 in April and I will lose 1400.00. which is just short of what my monthly mortgage payment is. I could still pay my mortgage payment, however, I would not be able to pay for lights, gas, water, insurance and property taxes with what is left if I don't get a job soon.

If I could get a job that pays as little as 10.00 an hour (I don't even need health benefits), I could make this up and wouldn't be in a bind. I've been actively seeking employment for the past year. Both within my field (IT) and outside. Grocery store, taking care of old people, car sales, inventory taker, shipping and receiving positions, you name it, I've had no luck. I can do practically anything. My problem is getting someone to pay me for it, especially since there seems to be 1000 people applying for any one position here in the great state of Michigan. It's got to be either that or my age (50) that hinders my obtaining work?

[JoDog]

21. Honestly, both

factors are working against you. You have lots of competition, and there is a lot of unspoken ageism going on out there.

Right now, you need to get a professional, preferably unbiased, financial opinion on what your best options are. Check to see if there are credit counselors in your area who would give you a free consult.

Try CCCS:

http://www.cccsstl.org/?referrer=google&credit+counseling&gclid=CK6l4oar15gCFRwpawodrD3ocQ

Stick with non-profit agencies, or call your county to see if there are any government-backed agencies that will talk to you.

Please don't give up. You are too young for that!

[customerserviceguy]

22. Well, here's an idea

borrow the $20K, pay off your $5K debt, and use the $15K to make payments on the mortgages until we can get some mortgage restructuring in this country.

You have an option to buy some time that most folks just don't have. If your mortgage company takes the house back with $220K debt on it rather than $200K, what's the difference to you?