Upside Down Mortgage

Mortgage Modification For Unemployed

Question: I'm unemployed and living off savings, should I not stop paying mortgage to WAMU and see a loan modification?

I'm 50 years old and a professional looking for work and my wife is going through breast cancer treatments. My loan is a 5.7% interest only and I owe a little more than the house is worth. Should I seek a loan modification from WAMU? I have enough savings for 6 months.

Answer: I would not just stop making payments. A better avenue would include one of 2 approaches.

1. Talk to a loan officer at WAMU to see if you can negotiate a lower rate or even a refinance. With the economy the way it is right now they are more willing to do this rather than the alternative of not receiving any payments or start any proceedings of foreclosure - especially when you tell them your unfortunate circumstances.

2. A free service called Consumer Credit Counseling Services can negotiate on your behalf to possibly reduce the interest rate, and thus your monthly payment you are making to WAMU. They also offer other services of reorganization of your debt / what you owe creditors that may better help you as well. Some of their additional services (should you opt into it) may cost a small nominal amount, but save you in the long run.

Just not paying is not the answer - remember, the initial actions on a person defaulting on a loan without speaking to a person results in actions first taken by their computer system.

Lastly, I wish you and your wife well and heartfelt positive wishes on her ordeal with her breast cancer treatments. Medical technological breakthroughs are high nowadays so keep positive as you maintain your loving support towards her.

Green Shoots or Economic Delusion: Is the Recession Really Over? pt. 2

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