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" &amp;quot;We&amp;#039;re stuck with a home we can&amp;#039;t sell.&amp;quot; \u2014 Michelle and Tom Magnetti Michelle is a 28-year-old recruiter for the Department of Defense; Tom is a 31-year-old new-home-sales consultant; they have a daughter, Giuliana, 11 months.  Location:  Denver Monthly net income:  $12,500&amp;amp;lt; House: In May 2004, Michelle and Tom purchased a 1,700-square-foot home in Colorado Springs for $190,000. Its current market value is $180,000.  Mortgage: $1,040 a month (not including taxes, utilities, or insurance) for a 30-year mortgage: The first 10 years they pay only the interest, then the mortgage will adjust and amortize over the following 20 years. The Magnettis also pay $1,460 per month for rent in Denver. Tom&amp;#039;s transfer to his company&amp;#039;s Denver office came with a promotion and higher income, but a three-hour commute each way to his home in Colorado Springs left him no time with his family. As a result, Tom and Michelle decided to move closer to Tom&amp;#039;s new office. They&amp;#039;re now renting a house in Denver, six miles from Tom&amp;#039;s job. They&amp;#039;d like to buy a house in Denver, but they can&amp;#039;t unload their former home.  The Magnettis&amp;#039; Colorado Springs house isn&amp;#039;t the only one for sale in their now-neglected golf-course community: One in five houses on their block is foreclosed. While they have a renter for their house, &amp;quot;we can&amp;#039;t sell without taking a major loss,&amp;quot; says Michelle. The couple regularly analyzes the market to make sure that the house is priced correctly. &amp;quot;We don&amp;#039;t want to buy a new home in Denver until we sell our old house,&amp;quot; says Tom. Expert advice: &amp;quot;The Magnettis shouldn&amp;#039;t continue to pay the mortgage, taxes, and insurance while waiting for the best offer,&amp;quot; says Lynnette Khalfani-Cox, author of Your First Home: The Smart Way to Get It and Keep It. &amp;quot;If Michelle and Tom get an offer that&amp;#039;s less than what they paid for the house, they should take it and be done with it.&amp;quot; The renter in Tom and Michelle&amp;#039;s old home isn&amp;#039;t even covering their monthly mortgage payment, she points out. To weather the blow of selling the house for less than they paid for it, the couple should bank Tom&amp;#039;s recent pay increase. &amp;quot;If they save $1,000 or more a month, they&amp;#039;ll be able to pay off the remainder of the mortgage when they sell their house.&amp;quot; In addition, the couple may qualify for the Mortgage Forgiveness Debt Relief Act (MFDRA) of 2007, a new tax-relief program. &amp;quot;In the past, if the value of your house declined and your lender forgave a portion of your mortgage, the amount forgiven was considered taxable income,&amp;quot; says Khalfani-Cox. &amp;quot;But with the MFDRA, that&amp;#039;s no longer true.&amp;quot; Once the couple sells their home, they should apply for MFDRA relief by downloading forms at irs.gov. In the meantime, Michelle and Tom need to be patient: The average time a home stays on the market right now is 10-plus months. &amp;quot;My mortgage reset \u2014 and now I can&amp;#039;t afford it.&amp;quot; \u2014 Lisa Gaboury Lisa is a 41-year-old medical biller; she has a 10-year-old son, Vinny. Location: Dunedin, FL Monthly net income: $1,800 (not including $1,100 in child support) House: Six years ago, Lisa and her then husband purchased a three-bedroom, two-bath home for $132,000. Its current market value is $200,000.Mortgage: $1,200 per month (not including utilities) for an adjustable-rate mortgage with a payment option: Lisa can choose how much to pay each month \u2014 the minimum, just the interest, or principal and interest. When Lisa and her husband divorced in 2006, she refinanced their mortgage in order to have the house solely in her name. While her payments started out low, the mortgage has reset every year since, pushing the interest rate higher and higher. Now Lisa can barely afford her payments. And because she&amp;#039;s made only the minimum payment each month, the additional interest Lisa&amp;#039;s mortgage has accrued has been added back on to the principal. &amp;quot;Despite making minimum payments on time each month, my total mortgage debt has increased \u2014 from $205,000 to $222,000,&amp;quot; says Lisa. She has tried contacting her lender to change the parameters of her mortgage. Instead, she received foreclosure paperwork. &amp;quot;I e-mailed the lender to tell them that I&amp;#039;ve never been late on a payment, but no one ever called me back,&amp;quot; she says. And refinancing with a new lender doesn&amp;#039;t seem to be an option: Lisa would incur a $6,000 prepayment penalty if she were to change the loan before three years. &amp;quot;I&amp;#039;ve been trying to get help for months, but it&amp;#039;s been nothing but a waiting game,&amp;quot; she says.  Expert advice: &amp;quot;Simply put, Lisa was issued a predatory loan,&amp;quot; says Khalfani-Cox. &amp;quot;She&amp;#039;s paying a higher interest rate than she should, and the loan terms featured prepayment penalties and excessive fees.&amp;quot; But Lisa likely qualifies for the Hope for Homeowners Act of 2008, &amp;quot;which lets you cancel an old mortgage and replace it with a new 30-year fixed-rate loan,&amp;quot; says Khalfani-Cox. &amp;quot;Lisa should qualify since she&amp;#039;s spending more than half of her income on her mortgage \u2014 in order to be eligible, you have to be spending more than 31 percent of your income on housing.&amp;quot; To set the wheels in motion, Lisa should contact the U.S. Department of Housing and Urban Development (hud.gov) about refinancing her mortgage with a government-secured loan. &amp;quot;For Lisa, who&amp;#039;s trying to preserve her credit and not miss a payment, it&amp;#039;s unfair that she hasn&amp;#039;t gotten the help she needs,&amp;quot; says Khalfani-Cox. &amp;quot;Unfortunately, banks tend to help those who are severely delinquent first. Lisa should stay proactive, document all communication with her lender, and put all of her requests in writing. &amp;quot;We can&amp;#039;t unload Grandma&amp;#039;s house!&amp;quot; \u2014 Cate Wylie Cate is a 55-year-old risk manager; she has a 24-year-old daughter, Anastasia. Location: Boca Raton, FL Monthly net income: $6,000 House: In 1996, the Wylies purchased a two-bedroom ranch in Belleville, IL, for $90,000. In July, the house was put on the market for $149,900. Mortgage: $1,080 (includes taxes and insurance); Cate&amp;#039;s rent in Boca Raton is $1,400 per month. Cate, her daughter, Anastasia, and her parents, Virginia and Arthur, lived happily together for many years in their hometown of Belleville, IL. But today, Virginia is the only one left in the family home: Cate&amp;#039;s father passed away in 2001; Anastasia, 24, moved to New York City; and Cate herself recently relocated to Florida for a new job. So the family decided to put the house up for sale. Virginia, 76, can&amp;#039;t keep up with maintaining the home, and the monthly mortgage payments have become burdensome for Cate and Anastasia, who both pay sizable monthly rents. &amp;quot;Plus, my mom needs to sell this house in order to fund her retirement,&amp;quot; says Cate. Unloading an outdated fixer-upper in a soft real estate market has become a challenge: The house has been on the market since July, but there&amp;#039;s been little interest. Cate and Anastasia fear that buyers are turned off by the quirkiness of the home. &amp;quot;The house is very I Love Lucy meets Three&amp;#039;s Company,&amp;quot; says Cate. &amp;quot;We need a buyer who sees &amp;#039;project,&amp;#039; not &amp;#039;problem,&amp;#039;&amp;quot; adds Anastasia.  Expert advice: &amp;quot;If the house doesn&amp;#039;t look good, you&amp;#039;ll lose a lot of interest,&amp;quot; says Khalfani-Cox. The Wylies should fix up the outside of the home, since that&amp;#039;s the first thing potential buyers see: Paint the exterior, clear out overgrown weeds, and keep the grass trimmed. Next, the family should focus on low-cost enhancements inside, such as painting the trim or replacing the carpeting. A stager, who&amp;#039;ll charge around $250 for a consultation, can also help them play up the positives of the house by rearranging furniture or adding modern accents to the decor. Finally, the Wylies should ask a local agent for comparable sales in the area, to make sure their price is competitive. &amp;quot;The house is only worth what a buyer is willing to pay for it,&amp;quot; says Khalfani-Cox. &amp;quot;But with a little extra effort, Cate and Anastasia can boost the home&amp;#039;s value.&amp;quot; GET YOUR BANK ON YOUR SIDE Speak to the right person.  Ask for the &amp;quot;loan modification department.&amp;quot; &amp;quot;If you call the bank and tell them you&amp;#039;re behind on your mortgage, they&amp;#039;ll put you right through to collections, which will get you nowhere,&amp;quot; says Khalfani-Cox. Read the fine print. &amp;quot;The more knowledgeable you are about your mortgage and how it works, the less likely you are to find yourself in trouble,&amp;quot; says Khalfani-Cox. Be up front about your situation. &amp;quot;If you were out of work or ill and can&amp;#039;t keep up with your payments, come clean,&amp;quot; says Khalfani-Cox. The more your bank knows about your circumstances, the more they&amp;#039;ll be able to help you. GET HOUSING HELP These nonprofits offer advice and assistance on mortgage counseling, foreclosure prevention, and more.  National Foundation for Debt Management, nfdm.org  Neighborhood Assistance Corporation of America, naca.com  ACORN Housing, acornhousing.org  Homeownership Preservation Foundation, 888-995-HOPE or 995hope.org   "^^<http://www.w3.org/2001/XMLSchema#string>
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