Question about foreclosure

[Dirty Hippie]

I have a mortgage on my home that is about 50% of my home's value.

Currently I work as a contractor for state government and my job seems stable for now, but I would likely be laid off if there were severe budget cuts.

I have almost no other debt.

My question:

If the worst happens and I lose my job, would my mortgage company be less likely to work with me given the fact that my home has double the value of my mortgage?

It seems they would stand a better chance of recouping their money, or even making money on those of us who have a wider value/debt ratio.

Am I correct or just paranoid?

[rurallib]

1. I am in a similar position and am also very curious about this.

[Warpy]

2. As it stands, nobody is buying and few are lending

so I think they'd be more likely to work with you than against you. In any case, should disaster hit, make at least partial payments--the most you can afford while eating beans and rice.

If the market were still hot and they had any prospect of selling quickly and making a profit, you'd be up the creek. Right now, you're in more of a power position than they are. They really need money coming in more than they need another empty house being trashed by vandals and vagrants.

[stopbush]

3. I'd worry less about your mortgage company's prospects and more about yours.

If you have that much equity in your home, you'd do well to consider selling the thing ASAP, taking the money and moving into a rental for awhile. At least you'd be in control. You could turn around and buy a new place once the market bottoms out.

No mortgage company will give you problems if you're current and tying to sell your home.

I just went through a short sale on my place. My mortgage company didn't want to hear about a short sale when they would have lost $30,000 on the sale. They waited until they lost $103,000 on the sale. Maybe things are different these days, but mortgage companies are very slow on the uptake in thinking outside of the box. Plus, they aren't staffed to handle less-traditional transactions.

BTW - my sale went through on 8/29/8.