Mortgage Forum

Joel Fraser

Hello, been reading here for a few days and found there's lots of info and people here to help figure out these mortgage problems. On top of that, I get the truth, for free. Here's my situation: I am active duty military stationed in Virginia. I am currently scheduled to PCS (move because the army says so) in July. This will get extended due to a deployment I've got coming up...but I will have to move by July 2010 at the absolute latest. I bought a townhouse here in Virginia in 2006 and I currently owe $425K, while the value is currently $300K at best. Similar houses in my area have sold for even less. I have a 1st with Indymac for $340K I/O fixed @ 7.65% and 2nd with EMC for $85K fixed @ 10.75%. Both loans were originated by 1st American Mortgage, then sold off. EMC bought both and then sold the 1st to Indymac. I am not in a VA loan and I bought this house after being on active duty. I am current on both mortgages, but I have run out of savings in order to do so as I had to cover two mortgages until my last house sold when the army moved me here. I originally planned to refinance to get better interest rates after the other house sold, but the market had bombed by then and my value was gone. However, I can make the payments without any issues. The problem is I'm stuck shelling out 56% of my net pay which I will not be able to do when the army moves me again and this place hasn't sold. On top of that, my net pay will immediately drop when I move by at least $1000, changing that to 66% because of the change in housing pay (DC area is about $1000 higher than other places). Therefore, I am trying to preempt the issue. I have applied for refinance with numerous banks to no avail. And I have called both Indymac and EMC to refinance to no avail. I have also talked to both loan mitigation departments and both have told me that based on my finances, I can pay so they wouldn't approve me. Both also said that I could try a short sale, but there's no guarantee. Now, I have yet to submit any paperwork and I have only called each a couple times so far. Just a few days ago, I was contacted by a guy that said while he couldn't find a loan for me, they have a program to reduce loan payments and interest rates by working with other banks. But, there would be a $499 fee up front and $5000 fee once approved. I nearly jumped on it, but while I was talking to him I mentioned that I had talked to the banks already and he freaked out. He wanted to know if I had submitted applications already, because if I had he wouldn't be able to do anything for me. Also, since I don't know what he knows, I might screw them up and get denied in which case I wouldn't be able to apply again for 12 months. But he did admit I could do it myself and save the money. So, I decided to get more info and found this place. Unlike most people, I really do not have the option of just walking away even though I really don't have any of my own money tied up because I have a security clearance to worry about. I'm interested to hear any suggestions on what I should do. I'm thinking that short sale is my only real option since I will have to move, can't refinance due to equity loss, loan is too large for VA, loan mods are temporary (not sure on this) and I risk my clearance and hence my job if it comes to foreclosure.