I have a financial question--WWYD?

**Lunar Keiki** · 09-29-2010 02:06 PM

I wasn't sure where to put this as it doesn't really fit into any of the other areas so I thought I would post here. I am a single mom. Minimal child support. I was living in my own apartment with the kids for the last several years and doing okay. Then last year due to the recession, I took a 10% pay cut. Coupled with several other financial pitfalls, I have been forced to move back home. I am working with a credit counseling company to get my credit card debt paid off. I just got tenants for my apt--move in on the first. I called a friend to find out about re-financing to get out of one of those really bad mortgage loans (interest only then balloon payment in 10 years). He told me about the loan modifications--a program to keep homeowners in their homes. To qualify you have to (1) demonstrate hardship, (2) the modification has to make your monthly payments better than they currently are and (3) be an owner occupant. I meet two of the three. I should have done this a few months ago. He said they will ask for 2010 taxes which show my old address and if I just keep my correspondence going to that address for the duration of the process it would work. My other friend said she wouldn't because what if I get caught. But I am so tired of the poor getting help, the rich not needing it and those in the middle just SOL! I know I am stretching the truth and I know it is really lying but is it really so wrong? I do intent to move back when I get back on my feet and the rent I get still won't even cover the mortgage. Is what I want to do really really bad?

**KayIncognito** · 09-29-2010 02:23 PM

Financial woes are never fun and I sympathize with feeling stuck BUT I would never recommend to do anything even mildly illegal. I doubt the laws in the US are any different than the ones here in Canada. You don't want to play around with this sort of thing.

As for buying a house, have you considered all the other factors that going into home ownership? Fire/water insurance, taxes, maintenance which is 100% covered by YOU - no Landlord responsiblity here. It is an expensive thing to jump into without some serious planning. You may be rushing things too quickly which is hard not to do but you should really do it the right way, legally.

**Lunar Keiki** · 09-29-2010 02:32 PM

No, I already own my apt--well the bank does. I am just trying to refinance out of a bad mortgage I currently have. A few years back there were these very bad mortgage lenders doing very bad loans. I fell prey. So now I need to refinance out if it. If I had done this a few months back when I was living there, all would have been kosher. But I didn't.

**Little.Chuck** · 09-29-2010 05:02 PM

I would also say you should avoid doing anything remotely illegal. The decision falls upon yourself as I dont think anybody here will give much input on this situation. I would say, do what you think is right for you. Choose the option with the most benifits.

**KMonte85** · 09-30-2010 07:00 AM

I dabbled in real estate a little bit in college while getting my degree in finance, so I'm by no means an expert in mortgages. However, I would advise against lying to get a loan modification.

Instead, talk to the BANK you have the loan with (not a friend) about your options for re-financing. It comes as a shock to some, but banks don't WANT to own your property - they are in the money business, not the real estate business, and every home they own costs them money. Because of this, banks are more willing to work with you (as opposed to against you) as many may think. Additionally, loan modifications are RIDDLED with scams and fraud - if this is the path you choose, tread carefully.

There are other options out there to get out of your ARM - ones that don't involve stretching the truth. I know you feel you are in dire straights now, but should you ever be caught, it will get much, much worse for you - this is fraud, and fraudulent activity is punishable with huge fines well above paying back the benefits you recieved (not to mention possible jail time).

**WildChild** · 09-30-2010 07:12 AM

When you talk to the bank you need to understand the structure. The loan officer is not the one you want to talk to, chances are they won't be much help with this. Start asking questions, they have a department that deals with this and they have options that the other departments don't have. They have different names for this department and often times the other employess don't know it exists, so you may have to ferret it out. I've worked in the mortgage industry before the S hit the fan and I've been the person doing the evictions, changing the locks and maintaining the property. I've talked to a lot of people about their dealings with the banks and believe me they don't seem much motivated to salvage loans but the programs are out there. You are going to have to search out what is available in your area. Your county services may be able to provide some information and resources, why not start there?

**Lunar Keiki** · 09-30-2010 12:51 PM

Thank you. Every red flag I can think of is up so I am not going that way. It is too shady. I have a call in to my mortgage company--they have something called a Home Assist Program. Every time I call, it says I may qualify for a loan modification through the Home Assist Program. When I try to research it on their website, it doesn't say anything about being owner/occupant. I am just going to be straight up with them and see what my options are. then I will be able to sleep at night! Thank you.

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