patrick.net

You are still way, way underwater. Live rent free as long as possible, then let it go.

Be sure to check all of the downside risks and legalities for your situation. It is a standard business decision.

I the loan were 20 percent above reasonable equity evaluation, I would make the payments, but not at that loan to value ratio.

STAT FOR FREE.

How much does it cost to rent something equivalent to your house?

Stay until evicted. Store you truly valuable possessions. Sell the rest of your treasure(Trash) & be prepared to move quickly.

dear Wall Street: Here's a gift for all those great things you do for all of us, $400 per month.

dear Property Tax Collector: we know the Civil Servants in our county work very hard for their employee benefits. It's a privilege, as a homeowner, to make the annual tax payment.

Squatting in East CoCo says

What would you do?

Move to Victorville before everyone else does.

In all seriousness - are you happy in your house? If so, why pay attention to its value? It's just a place to live and you gotta live some place. If you were planning on treating it like an asset and renting it out or tapping it for its equity at some point then that is a problem. Otherwise...just live in it and don't look at sites like Zillow for a dozen years or so.

Victorville, though, is a damn fine plan B.

Squatting in East CoCo says

Equivalent rent is about 400 less than modified mortgage payment, not including maintenance.

The first intuition is to walk, but take the emotion out of it and crunch the number and I came up with the following:

I would go back to B of A & ask for a 30-yr fixed at 4%. That would bring your monthly payment to $1,200/month, which is equivalent to rent. Looks like the write off would be enough to cover your property taxes and maybe even the insurance. The maintenance will be out of pocket, but you will have a free & clear house in 30 years with essentially no rent increase.

If B of A said no, tell them you will mail them the house keys. It is like playing poker. See who is calling whose bluff.

If things don't work out with the loan modification, you have two options: squat or short sale. The answer depends on your intention. If you want to buy back in 2 years while home prices are still low, short sale ASAP. I know many don't agree with this, but hear me out. Say you buy back in 2 years for the same property at $150k. Your total PITI will be less than $800/month with 20% down. With 3.5% down, your PITI will be about $900/month. Because of these numbers, the big boys are buying up distressed properties and renting them out for cashflow.

Squatting and dragging it out has its own benefit for the fact that you're saving money, but you won't be able to buy back for at least 4-5 years. If home prices are still low and interest rate is still low then, it makes sense. We don't have a crystal ball to know.

Tough choice. Whatever you decide to do, stick to it. Don't do it half way & call it quit. Good luck.