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I have an interest only loan on my condominium in AZ. A year ago, I tried to do a loan modification so I could secure a better loan in which I had a lower interest rate and some of my payment was going toward principal. The appraisal came in too low for what I owe on the mortgage and therefore, I was denied.
I am over $40,000 under- water on my condo, based on last year’s appraisal. Considering the short sales this past year in my complex, I am guessing $40,000 is on the low side of how much I’m under water.
In addition, my homeowner’s association is about to announce a special assessment of $12,000 per unit for repairs. They currently receive monthly maintenance fees and need more to make roofing repairs. I will be obligated to pay this special assessment and I cannot afford it. Between not being able to do a loan modification, paying nothing on principal (cannot afford to pay more each month) and the upcoming special assessment, it has left me wanting to walk away. I have never been late on my mortgage payment or my monthly HOA maintenance fees. Is there a way to speed up the process if I walk away? Should I contact the lender and let them know I cannot continue to afford my house? Should I continue to make my monthly HOA maintenance payment until I no longer own the unit?