Losing the home-equity gamble

Home Sale Hindsight

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Q: I'm 61 years old and in a bad situation. In 2006, I paid my house off and retired as chief financial officer for a public company. I wanted to invest in a new technology, so I called this mortgage broker who was always sending postcards to me in the mail. I had very little income, but had just entered into an agreement to work part time as the CFO for a startup earning a six-figure salary. The mortgage broker was able to get me a loan with nothing more than my Social Security earnings documentation and a letter from the startup's president. I pulled about $600,000 out of my home, with a first and a second mortgage (of course, now my home is worth only about $400,000). But I didn't realize that the first mortgage was a pay-option loan, so every month, my loan balance is going up. My investment opportunity flopped, so the money is gone. My mortgage broker is out of business. I'm missing payments and getting calls from the bank, and I'm trying to get the loan modified -- ...