Wednesday, November 12, 2008

Day 1: Mortgage Reality

Here is my first letter for "Change Your Reality Week." We are in a rather drastic situation (as so many are) with our house. Our neighborhood is half empty, values have fallen more than I could have ever imagined, and we have an ARM adjustment coming up in far too soon a time, with no hope of being able to get out of it. This is a letter--a shortened version, as I took some of the more personal information--to our mortgage company asking if they might renegotiate some of our loan terms to make our situation better. I believe, numerically, that we would qualify for consideration, although to be honest I don't know what criteria they are using. It's going in the mail today.

Dear Homeowner Assistance,

I am writing to ask that you consider renegotiating the terms of our loan in an effort to help us keep our house. We have been advised to enter foreclosure proceedings, but have not yet defaulted on our payments, and sincerely hope that with your help we can avoid this.

We purchased our new construction home at was later became evident was the peak of our local market, July of 2006. When we opted for an ARM, even with my job experience in the mortgage industry I had no idea what a foolish decision that would soon prove to be.

With the loss of my job in the mortgage industry, my husband and I lost more than two-thirds of our income. Additionally, since purchasing our house, we have seen values freefall around us, with no bottom in sight. Multiple houses on our street currently stand empty due to foreclosure, and the builder has been unable to sell the remaining inventory. If the recent few sales are any indication, our home has plummeted well over $100,000 in value.

We have no way to refinance or sell, and it is becoming very hard to make our monthly payments. Up until now, we have been struggling to put every spare penny towards our principal balance (at the cost of saving for our daughter’s future or our own) but we are now too strapped to do even that.

Our financial advisor has counseled us that it would be better to begin foreclosure proceedings now, as we have basically no hope of being able to refinance or sell before our ARM adjusts, and the longer we let this go, the more we lose. However, we would vastly prefer to keep our house. We ask, therefore, if you might consider altering the terms of our loan to help our situation. Two changes would allow us to continue to make our monthly payment; a lower interest rate would make our payments more manageable, and converting our loan from a 5-year ARM to a fixed rate would give us the security of knowing that we will not inevitably lose our home, regardless of all of our efforts, to an interest rate adjustment.

In making these adjustments, you would help us protect your investment. Please consider this request.

Sincerely,
Crystal & Mario

5 comments:

Coach J said...

Oh Crystal, I'm sorry to hear all this. I knew things were bad, but damn! I really do hope they can renegotiate. I think the renegotiations they've been talking about on the news should be reserved for people like you and Mario who ARE responsible and DO work hard. I hope things go your way.

v said...

Good luck with this, Crystal. I hope this letter does you some much-needed and -deserved good. [I don't know if I can actually use hyphens that way, but there you have it.]

natasha | sohobutterfly said...

Soooo scary! I say this far too often, but growing up is scary, isn't it? Especially in these uncertain times. Hope you get some action from this letter!

Unknown said...

I unfortunately am someone who gets super-paranoid about all things financial. It's good and bad, I guess. Anyway, you motivated me to do some research on really what the options are prior to having to foreclose. I don't know if you have heard about this company, but there is a company called You Walk Away, which helps people either take steps to have an easier foreclosure process or hopefully even prevent it. I visited their site, and there was a webpage you might be interested there: http://www.youwalkaway.com/forensic.php. Good luck. Hope this is helpful.

Unknown said...

<3 I hope hope things improve for you and for so many others in your shoes.