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Has anyone had to foreclose?
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Anonymous
| Long story short ... My husband and I own three properties in states other than the one in which we live. We relocated for his current job (which we didn't plan on doing when we purchased our last home). The HOA at one of the properties is defunct and has let the subdivision go, significantly reducing values that are already well below what we paid. Two of the properties are in a state that tops the list for foreclosures and decreasing home values. On top of it all, we rent here. A small apartment, nothing luxurious. So, we have three mortgages and rent on top of it. We are postponing having a family because of finances. My question is -- what would you do? Should we walk away from all three and start over? Please -- no moral and ethical lectures. I'm well past all that. Has anyone had to foreclose on a home and is their life after? Thanks for any advice. |
Anonymous
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Sorry you are in such a tough situation. Is there anyway you can sell even if you have to bring some money to the table? It's probably a little better to lose some money upfront than to have three foreclosures on record for ten years. Yes, foreclosures are ten years, not seven. If you foreclose you will have trouble renting, buying and will be in a tough place when you do start a family.
Do you have an arm? There maybe a way the bailout could help you. I am going to assume that you have already tried contacting your mortgage holder to see if they will work with you? I really would not walk away. You said no ethical talk so I won't go there, I am sure you feel crappy enough and I am sorry about that. It sucks to be in a tough situation, but please don't just walk away. It will be like a stain on your psychie. |
Anonymous
| Never been in this situation, but because of what pp said (10 years on record), I would suggest you buy a house here first - if you intend to live here for the next 10 years at least, THEN walk away from the others. |
Anonymous
I'm no expert, but I think she might have some trouble getting another mortgage right now. |
Anonymous
Yes, its a scam and FRAUD. It's called Buy and Bail. Search the archives for further details. In order to get away with this you have to LIE and say you have tenants in the property that are covering the mortgage. Lenders are getting smart to this SCAM and requiring at least 30% equity in the "rented" property. |
Anonymous
I rather hope this poster was joking. She can't afford her three houses, and you are suggesting she buy a fourth? |
Anonymous
I think she was serious. This is why the country is f'ed right now, people like her. Excuse me, I just vomited in my mouth. |
Anonymous
| OP, you should find out whether the state(s) where your properties are located are "recourse" or "no-recourse". If it's recourse, then the bank will be able to come after you for the difference between the balance of your mortgage and the sales price (which will likely be much lower than the market). Also, if you have balances on any credit cards, the interest rate will likely go up, possibly quite significantly. You should probably consult a lawyer/credit counselor of some sort before doing anything, as the ramifications of a foreclosure will stay with you quite a long time. Sorry for your situation, and good luck. |
Anonymous
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To summarize:
You have 2 investment properties and a 3rd property that was your primary residence but you relocated for work and could not sell it at a price where you would not need to bring $ to closing. Your investments are now worth less than what you paid for them - but you didn't really pay for them since the bank actually has the mortgage, you just signed the papers saying that you will make payments against this. Now that it is tough and you do not see yourself making a quick profit on these investment properties, you want to know if you can just walk away and what the ramifications are? Don't worry - John McCain will bail you out. |
Anonymous
The dems are talking the bail out talk too! I just listened to the black caucus this morning on c-span and this is what they were talking all about. However, realistically HOW is 300mil going to bail out many people??? There are approximately 400billion $$ worth of foreclosures in process right now and there is PLEANTY behind it, we're talking near a trillion dollars. |
Anonymous
| If you honestly cannot make your monthly payments then you need to talk to your mortgage company about revising the terms of your mortgages (ie. convert an arm to fixed, etc). It sounds as if you are saying, that the sales price of any of the homes will be below the mortgage currently owed on the home. Is this true for all 3? Do you currently have renters in the other homes? Walking away would hurt them as well as yourself. If one of the houses is unoccupied, would it be possible for you to leave this area and move back into that house? It will be very hard for you to get any sort of credit (credit card, auto loan, rent a house or apartment or even buy a house) while you have any foreclosures on your record. You will be much better off trying to work things out rather than walking away. |
Anonymous
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OP here -- thanks for the helpful advice. We have tried to refinance, not because we have an ARM but to try to take advantage of the lower interest rates. We were told that 2 of our homes don't even appraise for the mortgage value so refinancing is not an option. We do have a renter in one of the homes and we have considered keeping this home. The other two homes are in areas where many people are attempting to rent out their homes and we are having difficulty renting ours out, even for a price that wouldn't begin to pay the mortgage. Thus the problems we are encountering now.
Many of you have offered some good information which I had not thought of before. I think the state that 2 of the homes are in is a recourse state. Also, we do have some charges on credit cards so foreclosing would affect our interest rates. We have excellent credit (upper 700 - low 800) and have never been late on any payments, etc. However, we pay a total of about $6000 total per month for housing right now. For some of you that might not seem like a lot, but for us it is killing us. We'll give it some more thought and try to come up with a solution. We didn't purchase these homes to "make a quick profit" as a PP has suggested. My husband was in the military and we purchased in locations where we lived and then held on to the homes thinking we might return to one of those areas in the future and if not, could sell them fairly easily and at least break even. We had no idea that the market would crash as it has and that we would have trouble even renting the homes. Thanks to all who offered a sympathetic ear and solid advice. |
Anonymous
| Op, where are your properties, are they near the water or beach area? |
Anonymous
| If your husband is in the military then I would strong urge him to talk to the JAG. The military is not like a normal job and having a foreclosure on the record could very well hurt or kill his career. Ditto if your husband is out of the military and currently has a security clearance. Are you advertising your houses for rent at the appropriate locations on base? |
Anonymous
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If you husband is in the military and his job depends on clearance - your current situation - and definitely foreclosure can impact that.
Do you have any savings that you can put down so that you can refinance? This may be a question of your husband's ability to have a career and you need to think about the longer term items. |