How to Pay Off Mortgage That is Underwater

[mortimer]

Originally Posted by akrobat

... I am risk adverse ...

As soon as you move out of the house, it becomes an investment
and no longer just a personal residence.

Originally Posted by Ashburnite

... the OP should consult a professional ...

This is good advice.

I would add that the pro should be someone who has no skin in the game.
If you sell, they don't make any money. If you stay and rent it out, they
don't make any money. You pay for their time, they give you advice.
They give you hard numbers, you make a hard decision.

Originally Posted by akrobat

... and the situation with the house has
already added enough stress in my life.

I'm not particularly risk-adverse, but I'm totally stress-adverse.
I would want to see a rental property paying me a 10% net profit
in exchange for my stress.

I always compare a property ( ie. $200k property ) with a like
investment in 10-year T-Bills. Something that requires an active
involvement in ( whether through a manager or not ) and only
doubles my return doesn't compare well.

[jennerclay]

I saw an article in the NY Times last November entitled: "Wallstreet finds profits by reducing mortgages;" (google it.) It outlined a new mortgage deal that some hedge fund investors were planning on rolling out that would forgive ALL of your negative equity--and--give you 10% positive equity to start your new loan out with.

Last month my boyfriend's soon-to-be son-in-law found a hedge fund that was doing this. He had got the tip from two other people that had already started the loan process with this company. So since my boyfriend was severely underwater ($200,000) he and I checked into it and decided to apply for the loan too. It takes about 120 days for the loan to go through. It's possible that one could be rejected after the loan process has started; you won't know until the end. So we're about 25 days into the 120 wait.

This company is in Sacramento, however I came across another company in Arizona that's doing the same thing. They have a simple explanation of how it works and why they would be willing to do this for underwater homeowners. It's because THEY WILL MAKE BIG MONEY doing it! (Do you think the banksters would give us a bone if they didn't stand to profit handsomely?)

Anyway, here's the headline of the article that explains the process: "There is a new principal reduction program for underwater homeowners." Google it! You might qualify for the loan. Email if you'd like more info from me; I'm happy to help others get some relief from the banker's web of debt: jennerclay@aol.com (Debbie)