Mortgage Forum

Mike

Hi, and thank you firstly for all advice and guidance given. This is my current situation. I currently own 2 properties. The first I bought my self 4 years ago with 100% financing which I qualified for myself and the title is in my name. Currently, the first is with GMAC and the HLOC is with Greenpoint. The first is a pick a payment, negative-am ARM, currently at 5.875%. A year and a half ago I bought a second property with my partner, to be closer to work, we are both on title. At this time I rented my first property. Don't get me wrong I tried to sell it but the market was saturated. Based on the advice of my lender, I was told I could take the money out of first house, use it to purchase the second. The plan was to wait for 2 years, rent it out and then try and sell it again (which would have been this year). Then this whole mortgage debacle has happened and now my current situation on this property is as follows. It is rented and brings in 1700/monthly, my min. payment(of the pick a payment) on my first is $2053 which includes and escrow payment. I cover the difference and the HLOC payment. I am current on all payments and have never been late. I have contacted the county to reevaluate my property value and lower my taxes and have decrease my insurance to strictly a Fire plan, lowering my escrow account. The house has lost value to the tune of $165K. Once the payments adjust in 12/08 I will not be able to continue to make them. I spoke with a Realtor whom mention that I could try and short sale it, but with 2 lenders it is probably in possible, better to let foreclose. The Realtor also mentioned that the property value will not go up for another 5 years to where the value matches the current loan. My primary residence has of course lost value as well, but I am confident that I can afford all payments on it and not be a risk of losing it, and am willing to hold onto it for several years. Both properties are in CA, and my credit is currently excellent. Questions: Should I try and negotiate with GMAC to lock in this rate? Should I let the house go to foreclosure? Will I risk losing my primary residence? Should I quick claim myself off of my current residence deed to avoid losing it or it being affected? Should I try and short sale? The current renters are interested in purchasing it. Any ideas on a creative way of keeping the property, being that it is now an investment, (albeit not much of one, any more). I guess my ego is to big to let it go, it was my first house. Thank you for your time and advice. B:confused: