What is the name of your state? I'm in Virginia.
When we bought our home in 2006, we financed 85% of it, and the person we bought it from took out a second deed of trust for the rest of the purchase price. The agreement was that we would refinance the house and pay him what we owe him. He did not require us to make payments on this note and I have that in writing.
In the meantime, as I'm sure everyone knows, the housing market tanked. I've been trying to refinance my home for a year with no success. It was appraised in November at 128,000. It appraised again at the beginning of March for 88,000.
My first mortgage is a 30 year, negative amortization adjustable mortgage with a balloon rider of 70,000 after 30 years. The rate will begin to adjust in 2009. It was through my own stupidity that I didn't read the contracts closely enough and I just found out about the negative amortization from talking to someone at another loan company. I didn't even know what it was or that this was the sort of loan I had until they explained it to me. The mortgage broker told me at the time that what he had prepared for me was a 30 year fixed conventional mortgage.
The man we bought the house from said that if we foreclosed on the first mortgage, he would simply buy it back when it was auctioned off on the courthouse steps (which is usually what happens where I live).
I really don't know what to do. I will never be able to sell the house for what I owe on it as there is no equity in it due to the negative amortization . The only good news is that the early payment penalty (which I also didn't know about until I called to get a payoff document) comes off in June of this year. I have never been late on a payment to my first mortgage.
Really at this point, all I want to do is get out of this situation as quickly and painlessly as possible although I realize that painless part might be a problem. What should I do?
When we bought our home in 2006, we financed 85% of it, and the person we bought it from took out a second deed of trust for the rest of the purchase price. The agreement was that we would refinance the house and pay him what we owe him. He did not require us to make payments on this note and I have that in writing.
In the meantime, as I'm sure everyone knows, the housing market tanked. I've been trying to refinance my home for a year with no success. It was appraised in November at 128,000. It appraised again at the beginning of March for 88,000.
My first mortgage is a 30 year, negative amortization adjustable mortgage with a balloon rider of 70,000 after 30 years. The rate will begin to adjust in 2009. It was through my own stupidity that I didn't read the contracts closely enough and I just found out about the negative amortization from talking to someone at another loan company. I didn't even know what it was or that this was the sort of loan I had until they explained it to me. The mortgage broker told me at the time that what he had prepared for me was a 30 year fixed conventional mortgage.
The man we bought the house from said that if we foreclosed on the first mortgage, he would simply buy it back when it was auctioned off on the courthouse steps (which is usually what happens where I live).
I really don't know what to do. I will never be able to sell the house for what I owe on it as there is no equity in it due to the negative amortization . The only good news is that the early payment penalty (which I also didn't know about until I called to get a payoff document) comes off in June of this year. I have never been late on a payment to my first mortgage.
Really at this point, all I want to do is get out of this situation as quickly and painlessly as possible although I realize that painless part might be a problem. What should I do?
