Girlfriend has mortgage in foreclosure with IndyMac Bank what can she do interest rate is adjustable at 12.25?

Question

Girlfriend has mortgage in foreclosure with IndyMac Bank what can she do interest rate is adjustable at 12.25?

Answer 1

My god, 12.25%.  WHY!!!!

Unless she can refin, there isn't much.

Answer 2

This is what I'd do in this order:

Refinance - can she get a new loan?

Call IndyMac's "Loss Mitigation" department and ask for a loan modification.

Sell the house.  If need be do a Short Sale (if she owes more than the home is worth.)

Determine if you are Upside Down on the mortgage (owe more than the home is worth).

Determine whether or not she will owe 1099-C Cancellation of Debt Income.

Determine if she will be liable for a Deficiency Judgment.  These laws vary by state.

If you are upside down and have to pay tax on 1099-C income and are liable for a Deficiency Judgment and you are not able to refinance or sell the home, then let the bank foreclose.  Prior to the foreclosure sale contact a bankruptcy attorney and see if you can file a Chapter 7 bankruptcy and discharge the mortgage in the bankruptcy.

Hopefully you can just get the rate lowered and save the home.

Mr. Financial Freedom

http://www.5stepstofinancialfreedom.com

Answer 3

Your Girlfriend can go through a Short Sale process which is selling the home at a fair market value to satisy the note and hopefully she'll find a buyer, if she finds a buyer in most cases she can put in a postponement request for that foreclosure scheduled sale date, that short sale will show on her credit as "Satisfyed for less than the amount do" for 2/3 yrs. rather than a Foreclosure which will be on her credit for 7/10 Yrs.  If she can't do that she can do a Deed In Lieu which is Voluntarialy Deeding the Property back to the investor or the insurer in exchange to the obligations of the note, the home will have to be listed at a fair market value for at least 90 days and has to have in most cases only one lien on the property.

If the S.S. or the D.I.L. won't work she can try to see if she qualifys for any reteintion options, refinance options or the 5 Year Rate Freeze.

I wish you and your girlfriend the best, and there is always an answer, call your bank or look in her NOTE, she'll find the Investor and do some research on that investor.  Any bank will work with you, they rather keep a family in a home than taking another one.

Keep us updated!

Answer 4

Refi at a fixed rate of 6.25.

Answer 5

Wow, she really screwed up.

She needs to refi or walk.