How do we get help with our subprime loan?

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My husband bought the house in 2005 before we were married. (we were living together for 6yrs.) His credit score was 620. We had no money down and recieved 12% interest rate and 2 different loans to total the $ 115,000 for the house. We were told we would have to refinance in 3yrs. That would be no problem except in the last year my husband was without a job for 6months (I go to college) and we got 2months behind on the mortgage and had our car reposessed. We have 6 children combined together and are very low income. Now my husbands credit score has dropped significantly and we dont see how we can refinance. We definitly have a “subprime” loan and shouldnt have been granted the loan to begin with. What can we do if anything now after the fact?
Just FYI we dont smoke, dont drink and I am 2terms away from being a nurse and making good money. Also kids cant get jobs as the oldest is 11.
oops forgot one thing. We buy all our clothes at goodwill. mine and husbands as well. and we dont have cable.

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5 Comments
  1. Reply
    estielmo
    May 14, 2011 at 1:23 am

    Your husband tried to “game the system” as many did back then and you lost.

    Quit school and go to work. Get the older kids jobs to kick in money. Stop smoking, drinking and turn off the cable and internet. Stop eating out and buy all your household goods and clothes at yard sales and thrift stores. Move to a cheaper place

  2. Reply
    Shelby
    May 14, 2011 at 1:48 am

    Contact the local HUD office in your community. They will offer free or very low cost housing counseling to you and help you figure out what to do to save your home from foreclosure.

    http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm

    Good luck.

  3. Reply
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    May 14, 2011 at 2:06 am

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  4. Reply
    chatsplas@sbcglobal.net
    May 14, 2011 at 2:09 am

    Speak to your lender and see what options they can give you. Go to them NOW. Start paying on your arrearage, bit by bit. Go to local consumer agency, legal aid, for help, referrals.

    IF you give up the house, try to get an agreement of full satisfaction when giving deed in lieu of foreclosure, without a deficiency judgment or 1099C.

    You’re right you probably shouldn’t have been given the loan and helped to realize your dream of home ownership. But you guys chose to do this, made some poor choices, and no one forced you to do this. Work on your credit NOW. Pay every bill on time and in full. Pay down your credit cards and stop using them. It sounds like you’re cutting expenses to the bone, which is responsible. If you can hang in there until you graduate and get your job, you should be able to refinance at a decent rate with your two incomes, and a good short-term credit record. It would help a lot if you had a part-time job and brought in a little income in the interim. Can probably work as CNA or NA at this point in your studies. Understand with your studies and the kids, it is stretching you, but this is short-term. You can save this house and your credit rating, but it will take a year of hard work and sacrifice by you two.

  5. Reply
    Culture Warrior
    May 14, 2011 at 2:49 am

    You are probably going to lose your house. What you have going for you is that the number of foreclosures is increasing and banks are wanting to work with customers for longer periods of time.

    You may be able to prevent losing your house by trying to sell it and moving into a smaller rental. One that maybe you can afford.

    I’m sorry to hear about your situation. It’s tough and my prayers are with you.

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