Long Back Story Bear with me: Presently we live in the state of Ohio. We acquired our mortgage in 2016.
We began our search looking for low cost homes that we could easily afford, but our realtor at the time assure us that with a USDA loan we could get a nice home and an affordable payment. We found a home that was on the market for 124k, which was just at the high end of our price range. However, after speaking with our credit union who had issues our pre-approval letter she came to us and said they wanted over $8k for closing and that she had never had a client asked to pay so much. She assured us that a man she had worked with previously was great at getting homes financed and paying less at closing.
This man had us write letters about our finances and previous credit issues, paying off even the smallest of debts, and even securing a letter from our landlord at the time. We asked him if he was certain this was going to be ok because it seemed like a lot of work just to get anyone to look at our application.
Everything went so fast and in a swirl at the time, and he said our mortgage would be less than our rent at the time... not including insurance and taxes. Great we were excited. At closing we asked why the payment on the paperwork seemed higher than he mentioned and he filled us in literally last minute that they managed to get all our closing costs covered under USDA but that we could not sell the home for 7 years or be expected to pay the prorated difference of closing back.
Our payment was close to double what we had been told the entire time. We could afford it but we would certainly have to budget very tight with no room for error.
About a month after we moved into our home we received a letter from our mortgage company saying that our loan was being sent to a new mortgage company, and that we would send our payment to them.
Almost immediately we got a letter reflecting our first payment and again this payment amount was higher than what we were shown. Not by a lot but still higher. When we questioned it we were told that it was adjusted due to changes in taxes in our area.
Our home is in a nicer part of our hometown so we thought this seemed likely.
We make our first payment no issues. 1 week after we made our first payment my husband and I are awaken at 3 am by his supervisor telling him their shop had literally exploded and there was nothing left. As he is a Maintenance Technician this means he lost his own personal tools as well, and also his car that was at his work that evening.
Of course we were in a panic. New home, new mortgage, out the cost of thousands of dollars of specific work required tools, loss of a car plus having our family to take care of.
We contacted our mortgage company who told us we had not lived in the home long enough to qualify for any assistance through them but we lived in it too long to get out of the loan. They told us their underwriters could not give us a repayment plan because our credit was damaged from the new home purchase. My husband was told by his boss that they would paid a percentage until they could rebuild. So he did what he thought was best at the time and got a personal loan. We made the mortgage payments and got him a little crappy car so he could go to meetings with his bosses.
After 3 months rebuilding wasn't in sight so he took their package to walk away from the job. The very next day he was hired somewhere else. We were at this point 45 days late on a mortgage payment. At this time the payments were $872 a month. When we called the agent on the "financial crisis" department tolds us since the underwriters would deny us that we could do an "unofficial" repayment plan. We started paying $700 every two weeks this caught up our mortgage in 2 months and we were current. My husband had a new job, but was making just a few dollars less during this time because he was in a probation period.
I was also working from home so we had two incomes. We received a letter from our "new"ish mortgage company stating that because we were a greater risk our mortgage would be going up that August. Now to be $913 a month. At this time I lost my employment. So now we were 12 income, and I could not go back to work because childcare was too expensive at least for the time being.
We stayed current until that fall, when a medical injury set us back. Again same scenario. They told us we would not qualify for any sort of repayment plan and we struggled just to make it up because their system was unusual. If the payment plus late fee's was $1100 and I would call mid month to pay $750 they would tell us they couldn't accept less than the $1100. So we mailed in a payment and they placed it all in unapplied funds. when it reached a months payment it would come off the balance. We started noticing that from a payment of $1100 only $200 was principle. (Our insurance was about $120 a month, and taxes were about $100 a month)
When asked why we had more fees on the account even though we were paying the would tell us that unless we specifically requested part of the money we sent in to go to cover fines or fees that it went to interest. So the fines/fees had been racking up for months and they would consider the month as not paid in full and then again fine that amount.
We were current until Mid-September, even after they raised our payment yet again now to be $1,072. We made a partial payment of $500 due to a personal health crisis with me ( yet again:( sadly) and we sent in a loss mitigation packet complete with all the asked for paperwork. We did not hear back until the first week of November and they stated they needed all the statements and pay stubs to resubmitted because it had passed 30 days since the ones we mailed in. Now we are entering December and we have tried to discuss options with them but they keep saying we don't qualify, without even checking any financials etc. Again we have almost $600 in unapplied funds, we are late for partial September, october,November, and we have december coming up. Their most recent letter ( they send about 10 letters every week seriously) states we owe $4200 by December 3rd in order to stop further action. We have called them and every time they just tell us their underwriters will not approve us for any of the repayment programs. You would think these programs are established for people struggling at that it would be obvious credit may not be great during that struggle.
My husband has received a new job offer out of state to begin next summer, so we have discussed taking that and just moving. However, it would be hard if we just let the house go. We were told by a local HUD counseling agency that if we let it go to just live here still and save our money until they officially need us to leave.
We would rather list the home for sale and then move, but with what they are demanding on payment it doesn't seem likely.
We're not sure what to do. We don't want to start off in a new area screwed but at the same time we know we can repair our credit quickly with everything except that mortgage which we feel is predatory.
We have a lot of land that is owner financing , and we would just need to get a mobile home for that lot for the time being. Our goal would be to build a home once our credit is repaired.
Anyone have any idea what we could do or maybe just some advice?
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source https://www.reddit.com/r/RealEstate/comments/e48hch/foreclosure_questions_warning_long_post/
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