We're in a pickle :-( - Page 2

[zebra15]

Originally Posted by MaryLang

The tenants are IN the smaller house.
So what I'm saying is I would have to pay MY rent and the mortgage on THAT house, since they are not paying, this is what I can not afford to do.
Am I missing something about moving back that involves only paying on one of the houses? I can't stop paying rent on the house I am currently living in as long as I am living here. And I have to live here until that one is empty, and I don't know how long this will take.

I understand completely. You need to evict then tenants for non-payment if you want to move back to the smaller house. If you dont want the smaller house then just let it foreclose as I said above (this is probably what I would do in your situation since your credit is cr@p anyway) and start over. You may want to try for a free consult with a real estate atty just to see for sure where you stand.

[CarrieMF]

The tenants are IN the smaller house.
So what I'm saying is I would have to pay MY rent and the mortgage on THAT house, since they are not paying, this is what I can not afford to do.
Am I missing something about moving back that involves only paying on one of the houses? I can't stop paying rent on the house I am currently living in as long as I am living here. And I have to live here until that one is empty, and I don't know how long this will take.

Okay. I wasn't sure what you were referring to when you mentioned paying 2 mortgages.

your tenants haven't paid in 2months so start the eviction process tomorrow. The longer you wait the longer you will have to pay rent & mortgage. The longer you wait the less likely you're going to see ANY money out of them. If they could have paid the would have but it isn't your fault that they aren't paying so why give them a break on rent?

I still think your best bet is to move back to the small house. If you can make the payments on it going back there is your security that you won't become homeless. If you let the house go & it destroys your credit even more landlords may decide you're too much of a risk to rent to. Keeping the small house & making sure the payments are made on time you are in the process of rebuilding your credit.

[BetsyS]

Originally Posted by RiverSky

A foreclosure will likely take 12-24 months and during that time, you will need to save up so that you can plan for your future.

Just FYI--this may be true in Michigan, but it's not true everywhere. Where I live, foreclosures are incredibly easy for the bank. They typically happen when someone is 60-90 days late on the mortgage (as in, that's when the house goes up for auction at the courthouse). It's a very quick process here.

[VisionaryMom]

Originally Posted by zebra15

This may not be the popular vote on this board but have you considered letting the 950sq ft house go back to the bank? and just starting over? Either try to sell it (I know you said it wont tell for near what you owe, if it will sell at all) or do a short sell - if you can, or just give the keys to the bank. Sometimes you do what you gotta go.

I am pretty anti-bankruptcy unless there are *dire* circumstances. The OP's situation isn't dire. She and her husband made choices that led to this point. They modified a mortgage on a house that they knew wouldn't work for them. Now they just want to figure out how to get out of it, and frankly, that mentality disturbs me.

OP, if you evict the tenants, you move back in - one mortgage. Purge. Live a minimalist life. You can make it work.

Even if you let the house go, what will happen? Many, many landlords and complex managers check credit. A foreclosure isn't good. I know in my area, you'd be stuck in less-than-ideal apartments for a while. With 5 kids, that wouldn't leave you with tons of options.

What will you do in the future? Will you try to buy another house? How will you save the down payment? Do you have any assets?

Letting the bank take the house will mean ramifications for your family. I'm not talking about financial or credit scores, but you will have to find a place to live longer-term since obviously you're being kicked out of the current place.

To me, you aren't in a pickle. The answer is pretty simple, even if it's not the most desirable.

[Mulvah]

Originally Posted by VisionaryMom

I am pretty anti-bankruptcy unless there are *dire* circumstances. The OP's situation isn't dire. She and her husband made choices that led to this point. They modified a mortgage on a house that they knew wouldn't work for them. Now they just want to figure out how to get out of it, and frankly, that mentality disturbs me.

OP, if you evict the tenants, you move back in - one mortgage. Purge. Live a minimalist life. You can make it work.

Even if you let the house go, what will happen? Many, many landlords and complex managers check credit. A foreclosure isn't good. I know in my area, you'd be stuck in less-than-ideal apartments for a while. With 5 kids, that wouldn't leave you with tons of options.

What will you do in the future? Will you try to buy another house? How will you save the down payment? Do you have any assets?

Letting the bank take the house will mean ramifications for your family. I'm not talking about financial or credit scores, but you will have to find a place to live longer-term since obviously you're being kicked out of the current place.

To me, you aren't in a pickle. The answer is pretty simple, even if it's not the most desirable.

I could not agree more.

[confustication]

I also vote for moving into the smaller home- it seems o be the most logical approach- and you can absolutely make it work even with a large family- check out some of the smaller space threads as there are great ideas and inspiration there.

We live in a similar-sized place with no basement and less than ideal storage. The way we make it work with three kids is by purging excess and choosing what stays in the house. I'm waiting for my youngest to start walking so I can ditch a lot of the 'baby holding' stuff taking up the living room space. That's my sole frustration at this point.

[montlake]

Do you have a lease on the house you are renting from family? Would they expect you to keep paying for the rest of the lease even if you go back to your house?

Either way you need to get the tenants out NOW. You are not in a position to be offering free housing to anyone. Personally, I would not have let it get to a 2nd month of non-payment. You need to either get them out so you can move back in or get them out and find someone else to rent it.

[mtm]

evicting for non-payment can be hard in some areas. I'd give them notice that you want to move back in, that's a far easier route to take in my area anyway. And I think short-term you either have to turn the house over to the bank and walk away from it or move back in and deal with its size/no yard issues.

[Ianthe]

I would do one of two things:

1. Evict the current tenants of your 950 sf home and move back in... make it work with bunk beds, a new storage shed or renting a storage unit nearby, and lots of movable storage solutions. It is totally do-able to live this way, although maybe not ideal. When I was a teenager, my best friend's mom lived in a one bedroom apartment with her, her DH, his 2 kids (high schooler and middle school aged), my BFF, and occasionally my BFF's 2 brothers. So that was 5 and sometimes 7 people in a one bedroom apartment! The adults were in the bedroom, they converted the dining area into the teenager's bedroom with bunkbeds, and used a hideaway bed for the younger girl. When the brothers came for the weekend one slept on the couch and the other slept on an air mattress on the floor. -- you could do bunkbeds, hideaway beds and futons to make this work. Adults and baby in your bedroom, 3 or 4 kids in the other bedroom, or someone gets the living room with a futon.

2. Cut your losses in this terrible market and short sale. We had to short sale 2 properties due to DH's job loss, and don't regret it for a second. Our credit is already shot because of missing payments that we couldn't afford when DH was only getting unemployment, and it's better than bankruptcy and foreclosure. That way you are free to move on, and rent a place that fits your needs better than the small house.

Good Luck!

[Usually Curious]

I'd move back to the smaller house you own. I'd call the tenant and offer to forgive the last two months rent if they are out by the end of the month and leave the place in good, clean condition. Make sure they know that if they leave it messy you will pursue the back rent in court. That is how I got rid of horrible renters.

[MaryLang]

Well, she paid! So we'll go along and just try to follow where ever God leads. Phew That was stressful. I really got a better idea on this whole process if/when an issue comes up again.

And to CLARIFY on the home mod. We did it because it felt like the honest, moral thing to do at the time. We live in SE MICH., and had no idea how long DH would be laid off. He has friends that got laid off that are inching close to two years unemployed. So we did what we thought was best after continually being reassured by the bank it would not affect credit.
So instead of giving up easily and walking we needed to keep a roof at the time, and we couldn't afford the payments on unemployment.
We did make some bad decisions, in that we kept doing "the right thing" at every turn. Hindsight is always 20/20. Maybe we've been a bit naive and trusting.