HelloMy husband and I purchased our home in 2005 during the housing market crisis. We were forced to stay in the home which was significantl...

Question

Hello

My husband and I purchased our home in 2005 during the housing market crisis. We were forced to stay in the home which was significantly under water because we could not sell. During this time, we struggled to make ends meet and needed to borrow money from relatives, use my husbands retirement, and ultimately credit to make ends meet. We did not want to walk away or claim bankruptcy. We are very much behind in our financial picture as a result. We were finally given modifications on our first and second mortgages but too late. Met Life home mortgages denied our request for a modification forcing us to borrow 30,000 from a family member. Our question is do we have any legal grounds against the banks or mortgage companies who caused this situation and resulted in so much distress for our family over the past 9 years? We are gaining ground but are still paying back creditors and family and will for many years to come. Any advice would be greatly appreciated.

Lori Nicholas

Answer

Lori,

The short answer is no or probably no. You were not forced to borrow funds. There were options available (bankruptcy or just walking away) but you did not want to use these options. 2005 was prior to the economic bubble. Homes were overvalued and I don't deny that the banksters caused this whole mess but I don't see that you have any legal grounds to sue just because of this. If there was fraud or something with your loan, that is a different matter and if there was then maybe you should see a foreclosure defense attorney..

Do you qualify for HARP/HAMP? If not, then maybe the only alternative is just to walk away and either file for bankruptcy or not (depends on your circumstances but there may not be a deficiency judgment to worry about). Then you can focus on getting yourself back on track financially.