Sorry this is long but I need to vent and get advice. I'm scared.
I filed BK 7 in 2008 and included my house and a 2nd mortgage. I never reaffirmed. I stopped paying the 2nd mortgage 28 months ago. It had a balance of $37,000 and they said that they would "consider" an offer of $10,000 from me. No guarantees though. It's with DCU. This was over a year ago. God only knows what the balance is now.
We're at a point where we are thinking about moving, or possibly staying if I can reduce the amount of my mortgage with a lower interest rate. We currently have an FHA loan @ 5.5%. We've paid 7 years already and have a balance of $161,000.
I called Wells Fargo to get info on a refi and they said that they couldn't help me unless I re-open the BK case, reaffirm the mortgage and then they would be able to help me, but since the PMI rate has gone up I would only be saving $115.00 per month and I would be starting over at 30 years again. Totally not worth it. I don't think that I qualify for a mod because my income is over the guidelines. Not to mention that the 2nd mortgage would just be looming in the background waiting for equity and then take the house away, or demand full payment, since they know they have me in a corner.
The financial problem that I have is that right now I have to pay for private school. The elementary school, middle school and high school in my district are under performing and my children would be a minority. Right now, private school is stretching it a bit, but we could make it. But when my daughter gets to high school (3 years) I just seriously can't afford private school tuition, especially for 2 kids. I'm not even sure the current private school is going to be able to meet my kids' needs because of disabilities they have. The school isn't really staffed to deal with them, and I don't think they know how to really. It's a struggle.
I am SO SCARED not to pay the mortgage. I like this house and wouldn't mind staying but I have to keep in mind my mortgage payment + private school and weigh my options of moving to a larger house that would better suit us, and putting them in a great public school so they get the academic help they're going to need.
Anyway - I guess I just want to know what to expect when I stop paying. I owe 161,000 and my BIL's house that has one less bedroom just appraised for $157,000. We also have a FC on our street, same style house but not as nice as ours and it's listed for 80,000 and under contract now.
HELP!! Any thoughts or advice are greatly appreciated.