Update: Trying to avoid foreclosure by working with the bank on a quick sale #132 - Page 3 - Mothering Forums

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Old 10-25-2007, 12:44 AM
 
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Wow, this sounds so hard!

I would look seriously into getting a job before I foreclosed. Since your family is so on the edge it might be a good idea anyway--especially if your husband is facing a layoff. (And you might even enjoy it!)

How about a job AT a day care? They are often looking for assistant teachers, and sometimes your kid can attend for free or cheap. Then you could still be at home with DH at night. (That won't be a job you can just quit, though--you'd have to stick it out until June or however their calendar goes.

Can you babysit/nanny at your house a few days a week? One kid 3 days a week at $40/day = $120 week. (this depends on what the going rate is in your neighborhood of course)

Have you ever waited tables? At a nice restaurant you can make a decent amount of money just a couple of days a week. You probably won't get a good shift unless you have experience, though, and it is exhausting.

Lots of department stores hire extra staff around the holidays--which is probably starting soon.

If you are making some money, you will be under far less stress and you will be able to think more clearly about everything. And it's just a job--you don't have to work there forever. A few months--or years!--of your working PT is not going to ruin anyone's life. Making money for your family can certainly be a part of being a good mama.
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Old 10-25-2007, 01:04 AM
 
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Well, I am sorry for any hurt feelings I have caused by speaking bluntly. The OP did ask for honesty, and that's what I provided, but I should remember that there are real people involved and that sometimes people have no interest in hearing my honest opinions, and that it probably doesn't help anyway.

I speak out of my general frustration with the entire foreclosure fiasco. If this is happening to hundreds of thousands of mortgage holders across the country, I can't see how it's not going to hurt ALL of us. I'm angry with the lenders for allowing this to happen, but I'm also bothered by borrowers that won't take any personal responsibility for getting in over their heads. If people take out an adjustable rate mortgage even though they can't handle an additional $200 in monthly payments, I just can't feel too sorry for them. It's a THIRTY YEAR commitment -- it's hard to imagine anybody thinking interest rates were going to stay so low for that long. Hence my frustration.

I'm sure it's incredibly stressful to personally be in such a bind. I meant no harm to the OP by speaking so bluntly, I was really speaking to the situation in general rather than to the individual at hand, although I'm sure that's not how it came across. I do honestly hope the OP finds a happy way to resolve her situation. I'm just kind of astonished (and really sad) that so many people are in this situation in the first place.
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Old 10-25-2007, 01:07 AM
 
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first- we ALL make mistakes. you're not even close to the first person this has happened to, and you are trying.

I'd take it off the market and see what they will do then. Like you said, the chances are it's not going to sell any time soon anyways, and if it does it will be at a loss, so might as well temporarily take it off and see if they'll cut you a deal.

meanwhile, I think either taking kids into your home or watching other's kids in their homes should be explored, assuming you like other people's kids enough to be civil to them a few hours a day (which I know isn't easy, as a former nanny and dcp). you should be able to pull in enough to cover groceries and the extra $200 if you can do that fulltime, plus you won't have to put your son in daycare.

Or, try to find a bartending or waitress job for weekends- yes, it will involve a time sacrifice with your marriage and child, but something has to give, yk? if there is a popular nightclub, sports bar or restaurant that's not too skeevy near you, it might be an option.

don't ever say you have no skills- you do. you know how to care for a child, you know how to type on a computer in English (with no spelling or grammar mistakes that I could see), and you're an intelligent, thoughtful person. Do whatever you can to avoid a blight on your credit, give the market a year or two to rebound, white knuckle it for a bit longer if you need to-and if all that fails, then you can say you did the best you could and if it forecloses, so be it. but credit is extremely important, imho.

DD1 7/13/05 DD2 9/20/10
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Old 10-25-2007, 01:21 AM
 
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Somewhere it was mentioned that you need to pay $200 more a month. It sounds like a lot when you're broke, but I made $156 today babysitting (4 different families, part-time hours for each. It was a hard day, but we need the money).

Midwife (CPM, LDM) and homeschooling mama to:
14yo ds   11yo dd  9yo ds and 7yo ds and 2yo ds  
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Old 10-25-2007, 01:21 AM
 
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Nothing smart to say, but wanted to give you a hug. I've been in similar straits before, though not as severe. I really do know how you feel.
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Old 10-25-2007, 01:58 AM
 
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ITA with Shaggy Daddy on this.


Quote:
Originally Posted by jennica View Post
... She said, "well, we can't do anything untill you are late 30 days, so yes." So then after 30 days, we send in our income and our expenses and if we have a zero balance at the end (including gas and groceries), then we will be approved for a quick sale. If we try a quick sale and it doesn't work, then we may be approvedto just hand over the dead back to the bank. Both of those things go on our credit for 10 years. She said it likely would not infringe on us being able to rent a place, but that we should check with prospective landloards. She said there is no tax liability, we just walk away free and clear, and our loan is forgiven. She said that it isn't a good thing to have on your credit, but it is not as bad as foreclosure.
My 2 cents worth:
* Quick sale (short sale) or deed in lieu of foreclosure is sounding good here. Though there may be IRS payments in your future, despite what the bank said :
* I am guessing that a rental near your husband's employer will be much less that home ownership costs (example: about $1600/mo vs rental about $800) .. so rental will put you back on your feet. Many private landlords will be willing to take you despite the deed-in-lieu, especially if you have a deposit. Or you can rent from someone trying to sell their house in a similar situation, for example a person relocating.
* you might want to double-check your real estate agent situation. Meet with 3 local real estate agents and ask for their "no holds barred" opinion on pricing to sell your house (and if there is anything else you can do to sell it) A good real estate agent will be able to explain to you why its still on the market (overpriced, oversupply, bad neighborhood or ???) IF there is a problem with the existing agent, you can fire him/her. The agent will actually be relieved.
* You WILL be able to buy a house in the future - just you will need a down payment of 5-10% and/or a cosigner. Lots of people with "impaired" credit buy homes, and they will in the future. IMHO, you have been caught in a credit/ARM squeeze that was initiated by the mortgage industry (as shaggydaddy mentioned) The mortgage company approved you based on loan-to-income ratios that had very high risk of default in 3 years. They were gambling.
*one option (probably to avoid) is to refinance for 40 years, hopefully to lower payments.

If you want to talk (by phone!) pm me.
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Old 10-25-2007, 02:09 AM
 
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Originally Posted by chinaKat View Post
If people take out an adjustable rate mortgage even though they can't handle an additional $200 in monthly payments, I just can't feel too sorry for them.
Her extra payments are MUCH MORE THAN $200 a month. Here is how (all figures are guesses - I have no insider information here):

Budget 2004 for new house purchase:

Mortgage payment: $1200 (per month)
Property taxes $ 200
Gas for commute $75

For an expected monthly cost of $1475, with the expectation that it will go to $1675 in 07.

Then, bad things happen. Cost of gas doubles. Taxes increase by 50% to build new school for all the new housing. Insurance increases 10%. Monthly payment (plus gas) is now $1650 or more.

In 2007, the fixed rate of the 3/1 ARM ends. And the rate is now higher, increasing monthly payment by $200. Actual monthly payment (plus gas) is now $1850. And we have not even factored in home heating costs (oil, natural gas, etc) rising by 30% this winter, increased health insurance costs, etc.
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Old 10-25-2007, 02:18 AM
 
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Originally Posted by chinaKat View Post
Well, I am sorry for any hurt feelings I have caused by speaking bluntly. The OP did ask for honesty, and that's what I provided, but I should remember that there are real people involved and that sometimes people have no interest in hearing my honest opinions, and that it probably doesn't help anyway.

I speak out of my general frustration with the entire foreclosure fiasco. If this is happening to hundreds of thousands of mortgage holders across the country, I can't see how it's not going to hurt ALL of us. I'm angry with the lenders for allowing this to happen, but I'm also bothered by borrowers that won't take any personal responsibility for getting in over their heads. If people take out an adjustable rate mortgage even though they can't handle an additional $200 in monthly payments, I just can't feel too sorry for them. It's a THIRTY YEAR commitment -- it's hard to imagine anybody thinking interest rates were going to stay so low for that long. Hence my frustration.

I'm sure it's incredibly stressful to personally be in such a bind. I meant no harm to the OP by speaking so bluntly, I was really speaking to the situation in general rather than to the individual at hand, although I'm sure that's not how it came across. I do honestly hope the OP finds a happy way to resolve her situation. I'm just kind of astonished (and really sad) that so many people are in this situation in the first place.
Kinda funny that you talk about your frustration with people not taking responsibility when what you did here was basically say the same thing, not relevant to the discussion at all, without taking responsibility for the fact that you said some really offensive, unnecessary things. She asked for opinions about her situation, not in general, and you came in and pontificated for a bit without offering any advice. This isn't about people not wanting honest opinions, it's about you offering one that wasn't asked for.

The fact that is happening to so many people across the country should be a clue that something is wrong with the process, not the people finding themselves in this bind.

Life does not always go the way we think it will. Most of us learn that the hard way, and don't need the added pressure of strangers judging us and using our discomfort as a platform for their personal rants.
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Old 10-25-2007, 02:39 AM
 
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Oh wow, mama. I have no advice, I've never been a homeowner, but I do know bad credit and how hard that is to dig yourself out of. I hope you can find a solution that doesn't wreck your credit.
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Old 10-25-2007, 03:06 AM
 
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I'm going to be totally honest since that what was asked in the OP. I would feel a lot more sympathetic if this post had a tone of "we got ourselves into this mess and it's awful, but we're willing to do everything in our power to make it right."

Jennica--I know this is hard and stressful. I am honestly really sorry you're going through this. However, I really, truly feel like you need to own up to the (legal and ethical) responsibility you have and do what you can to pay your mortgage. It just seems like you're continuing to look for an easy way out. You foreclosing on your mortgage doesn't just cost you--it costs your bank and other home owners as well. You don't seem willing (unless I'm reading incorrectly) to work in order to meet your commitments.

I don't believe that being a stay-at-home parent is an inalieable right. It's wonderful if it works, but if you have financial responsibilities that prevent it, so be it. We can't afford it and that's okay. I just don't think it's fair to let other people pay for a choice you made that's no longer attractive.

Again, it would be a different situation if you were both working full-time and couldn't swing this. It just doesn't sound like that is the case.
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Old 10-25-2007, 03:42 AM
 
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I disagree. My commitment to my children is stronger than my commitment to any bank. I would not go to work full-time in a minimum wage job to avoid forclosure.
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Old 10-25-2007, 04:12 AM - Thread Starter
 
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Quote:
Originally Posted by SleeplessMommy View Post
Her extra payments are MUCH MORE THAN $200 a month. Here is how (all figures are guesses - I have no insider information here):

Budget 2004 for new house purchase:

Mortgage payment: $1200 (per month)
Property taxes $ 200
Gas for commute $75

For an expected monthly cost of $1475, with the expectation that it will go to $1675 in 07.

Then, bad things happen. Cost of gas doubles. Taxes increase by 50% to build new school for all the new housing. Insurance increases 10%. Monthly payment (plus gas) is now $1650 or more.

In 2007, the fixed rate of the 3/1 ARM ends. And the rate is now higher, increasing monthly payment by $200. Actual monthly payment (plus gas) is now $1850. And we have not even factored in home heating costs (oil, natural gas, etc) rising by 30% this winter, increased health insurance costs, etc.
Thank you! This is what I was trying to say. It isn't a $200.00 a month increase, it is much more than that. And yes heating and gas bills I didn't even touch on, but for the last couple years they have been impossibly high. Winters are very hard to afford for us.
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Old 10-25-2007, 04:45 AM - Thread Starter
 
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Originally Posted by jennybear View Post
I'm going to be totally honest since that what was asked in the OP. I would feel a lot more sympathetic if this post had a tone of "we got ourselves into this mess and it's awful, but we're willing to do everything in our power to make it right."

Jennica--I know this is hard and stressful. I am honestly really sorry you're going through this. However, I really, truly feel like you need to own up to the (legal and ethical) responsibility you have and do what you can to pay your mortgage. It just seems like you're continuing to look for an easy way out. You foreclosing on your mortgage doesn't just cost you--it costs your bank and other home owners as well. You don't seem willing (unless I'm reading incorrectly) to work in order to meet your commitments.

I don't believe that being a stay-at-home parent is an inalieable right. It's wonderful if it works, but if you have financial responsibilities that prevent it, so be it. We can't afford it and that's okay. I just don't think it's fair to let other people pay for a choice you made that's no longer attractive.

Again, it would be a different situation if you were both working full-time and couldn't swing this. It just doesn't sound like that is the case.
I'm not asking for your permission, I'm asking for advice. It isn't my first choice to let the house go, and I am still debating it.

About working, yes, I am totally willing and prepared to do that. I have been looking for a job for the last month. I could look harder, I admit that, but I was starting the process of looking. DH doesn't want me to get a job and here is why. First, it will not be good for DS, he is going through a thing right now. Yes, I know it will pass, but we still worry. Second, if I work weekends, that means DH can't. DH makes time and a half on Saturdays and double time on Sundays. If I work every Saturday and Sunday I will make less than he would if he worked a couple hours both days. He would also never get to see me, I wouldn't be able to join in any fun or weekend activities. I don't want this and DH doesn't want this, and DS really wouldn't want this. I agree that sometimes we have to do things we don't want, however, it is upsetting to know that I will be working at a dead end job for an indefinite period of time in order to just make ends meet. Not to get ahead, or pay off debt, but just to put food on the table and pay for gas and our increased mortgage and other bills. I do have my application in at a couple places, and I would just work weekends with them, but so far I haven't found anything. A full time job means that ds would be in day care all day, and at this point in his life I really feel that would be very hard on him. I would do it if I thought the benifits to our family warranted it, but it seems that the only benefit is that we have to stay here longer.

About daycare, I worked at a daycare center in the past and I had to quit because it was just something that I could not do in a way that I thought it should be done. Limitations of my personality I guess, but I had a very hard time there dealing with the kids all day, the bickering of the staff, the two faced teachers who the parents loved and then would be mean to the kids the minute the parents walked out the door, etc. etc. etc. I just couldn't do it. The entire environment was contrary to my beliefs about how children should be taken care of. I might be able to take a kid in my home, but it would really depend on the kid. It's something to consider.

I guess the bottom line is that I am afraid that this is the beginning of a recession. I don't see it ending any time soon, and it seems that the more people foreclose the worse off it is going to get. And yeah, I guess I'm adding to the problem, but if this thing lasts five years, I don't want to waste five years of my life because I was trying to be honorable. I understand doing the right thing and trying to be ethical, I have always lived that way in the past. And if I knew that this would be over in one year, I might be a lot more inclined to do that. But, it just doesn't seem like things are getting better any time soon. Maybe I'm wrong, I don't know anything about it, I just have this feeling that if we stay and fight to keep the house we might loose it in the end anyway. Or, we might get stuck here in fight mode for YEARS, so why not just rent for years and build up our credit again instead?
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Old 10-25-2007, 10:20 AM
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I work in the mortgage industry (in one of the harder hit companies: Hint the Nation's largest home lender). I can tell you 100s of thousands have already made this choice.

While I tend to be a "you made your bed" type of person, Personal responsibility can only go so far. Mortgage companies have foreclosure built into their business plan. If you have no defaults, you are not lending enough. That is OFFICIAL policy of most banks. You have to have some defaults or else your lending standards are too tough and you are not lending as much as you could.

In the typical foreclosure, the bank loses 20-30% of the value of their loan. What we are seeing now is that the mortgage companies gave away so much free money in the form of ARMs that they knew would likely result in foreclosures that they inflated home values by giving everyone loans beyond their income. Now that home values are deflated somewhat, a mortgage company stands to lose not 20-30% but 50-80% in some areas. Because of this mortgage companies are rushing to restructure cruel and unusual loans which were designed to cause defaults.

So although each individual should get a wake-up call for falling for the ARM trap, you can't just blame the mouse because they got stuck in a very complicated mouse trap. Sure the mouse gets some blame, but you have to place the blame firmly on the group... Consumers who borrow too much are guilty, banks who lend too much are guilty. The concept of "The American Dream" is guilty. Not everyone wants, needs, or can afford to be a home owner, but we are all lead to believe that is the only option.
And the thing is, many people were outright lied to by lenders, by idiots in the media, etc. who believed that the housing bubble would never burst, that things would keep just going up and up and up in defiance of Newtonian physics and basic economics.

That said, though, a lot of people simply got greedy and let their materialism run rampant -- why NOT buy far, far more square footage than you need? Why NOT buy in a neighborhood you can't afford? The idea that my DH and I actually bought a small house in a lower-middle-class neighborhood really offended my mom, who insanely advised us to take out as much loan as we were offered and buy accordingly. Lots of people did the same.

The short sale might be the way to go.
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Old 10-25-2007, 10:32 AM
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Originally Posted by jennica View Post


Oh God, it was never new and shiny. We could only afford the crappiest house in the crappiest area and thought to ourselves, "well, we can fix it up and then make a profit if we sell it, or we'll just stay and live there if we like it."
But then the thing is, Jennica -- and I know this is coming way late as an observation -- it doesn't sound like you could afford to live in your area if you "could only afford the crappiest house in the crappiest area." I feel sorry for you guys because I think many, many people were not given clear, understandable information about the genuine risks of an ARM vs. a fixed-rate and thought they would be able to swing it.
Quote:
No way. Now that is uncalled for. We have never, ever, in our lives payed a rental or mortgage payment late, nor have we payed a credit card late, nor a utility bill unless it was a total accident, which happens to us mortals. I have a long credit history that I can point to. Anyone who wouldn't look at the whole picture is not worth renting from anyway. With all the people foreclosing, vacancy rates are VERY LOW -- landlords can now afford to pick and choose whom they believe to be "worth" renting TO.
The thing is, you won't necessarily have the luxury of choice here. You may have no choice other than to rent from someone who would turn you down as renters because of a foreclosure. In all honesty, a foreclosure would (and should) give many property owners pause for the reasons mentioned above.
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Old 10-25-2007, 10:45 AM
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Originally Posted by SleeplessMommy View Post
Her extra payments are MUCH MORE THAN $200 a month. Here is how (all figures are guesses - I have no insider information here):

Budget 2004 for new house purchase:

Mortgage payment: $1200 (per month)
Property taxes $ 200
Gas for commute $75

For an expected monthly cost of $1475, with the expectation that it will go to $1675 in 07.

Then, bad things happen. Cost of gas doubles. Taxes increase by 50% to build new school for all the new housing. Insurance increases 10%. Monthly payment (plus gas) is now $1650 or more.

In 2007, the fixed rate of the 3/1 ARM ends. And the rate is now higher, increasing monthly payment by $200. Actual monthly payment (plus gas) is now $1850. And we have not even factored in home heating costs (oil, natural gas, etc) rising by 30% this winter, increased health insurance costs, etc.
Hey, Sleepless -- I have a new job for you.

Mortgage Doula.

(Seriously, we need mortgage doulas in this world!!!)
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Old 10-25-2007, 10:58 AM
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Originally Posted by jennica View Post
I'm not asking for your permission, I'm asking for advice. It isn't my first choice to let the house go, and I am still debating it.

About working, yes, I am totally willing and prepared to do that. I have been looking for a job for the last month. I could look harder, I admit that, but I was starting the process of looking.
Jennica, I notice that you are multiply distancing yourself from this and your language clearly indicates that you made no serious moves toward getting a job -- you were (notice the past tense) starting (which means you did not actually get into it) the process (a vague term) of looking.

Quote:

DH doesn't want me to get a job and here is why. First, it will not be good for DS, he is going through a thing right now. Yes, I know it will pass, but we still worry. Second, if I work weekends, that means DH can't.
So work during the week.
Quote:

DH makes time and a half on Saturdays and double time on Sundays. If I work every Saturday and Sunday I will make less than he would if he worked a couple hours both days.
This is a nonargument if you work during the week.
Quote:

He would also never get to see me, I wouldn't be able to join in any fun or weekend activities.
I'm sorry to sound harsh, but this may be a luxury you cannot afford. Many times, your words and general tone suggest that you appear to believe that you're above all that has happened to you -- that you can reject landlords who aren't "worthy" enough to rent to you with your (hypothetical) foreclosure, or that you shouldn't have to live in your "crappy" house and "crappy" area, or that in a time of serious financial crisis when what you're facing is a foreclosure (or at the very, very worst, homelessness), you are entitled to "fun or weekend activities" when your family's security might depend on your decision to hang tough and take responsibility and do what you can.

Again, I'm very sorry for what has happened to you. With all the gentleness I can muster, can I offer you a definition here? An irresponsible person does what she wants. A responsible person does what she must.
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Old 10-25-2007, 11:18 AM
 
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The thing is, you won't necessarily have the luxury of choice here. You may have no choice other than to rent from someone who would turn you down as renters because of a foreclosure. In all honesty, a foreclosure would (and should) give many property owners pause for the reasons mentioned above.
: I suspect that despite the fact that many folks are facing similiar situations it still will make renting hard to do. After all we are talking about having a record that basically says you didn't/couldn't pay your housing costs, not credit cards or something like that.

Jennica, you mentioned having a great credit history, well the thing is once you get a blemish no one is going to look at your great past. I know people who filed BK because they were making the payments every month but they were robbing Peter to pay Paul so before they filed they had never missed a payment, but they were stretched beyond belief. Well once you get a strike no one is going to say well before that you were ok.

I hear you about not feeling that work is going to pay but truthfully even if you took a job where you made $300 a week and only netted 150 a week (after childcare and gas)that would still bring in enough to cover what you are short of.

If I am understanding this you want to leave this area you are in but you are also short money just to maintain your current housing situation. To some degree I see this as 2 seperate issues, first situation is to keep roof over head now and basics of life, second issue is more long term, how to relocate back to a more desirable area. Others have mentioned taking the house off the market and refinancing, maybe that is an option to seriously explore. Once you are stable where you are now then you can look more into the long term of moving where you prefer to live.

I just wanted to add that work does not have to be an all or nothing situation, once you start working you can simply do it long enough to stabilize things and later stop and become a SAHM again. I don't know what the issues are that your son is facing but it seems to me a stable living arrangment would be high priority.

Good luck! Sounds like you have a lot to decide.

Shay

Mothering since 1992...its one of the many hats I wear.
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Old 10-25-2007, 11:41 AM
 
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Putting it up for auction is a really quick way to do away with the whole headache. Your Realtor can give the listing to the auction house if you're already in a contract with him/her. You probably won't get as much as you want for it, but with a really good auction company who advertises really well, it should at least attract several bidders. (I'm a Realtor and just helped out with one of these recently).
candiland,
This is a great idea. I hope the OP sees it. Does the Seller have to make sure a reserve price is set or would the realtor make sure of that?
~Cath
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Old 10-25-2007, 12:36 PM - Thread Starter
 
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That said, though, a lot of people simply got greedy and let their materialism run rampant -- why NOT buy far, far more square footage than you need? Why NOT buy in a neighborhood you can't afford? The idea that my DH and I actually bought a small house in a lower-middle-class neighborhood really offended my mom, who insanely advised us to take out as much loan as we were offered and buy accordingly. Lots of people did the same.
Just so you know, this wasn't us. Both times that we have looked for a house we have scraped the bottom of the barrel as far as what is out there. We ended up an hour away from everyone instead of a half hour in order to find a cheaper place that was still decent enough to live in. We bought a house that we were not crazy about, but simply settled on because it was the best we saw. We didn't take out the maximum we were allowed, nor did we insist on some wonderful home that we couldn't afford. We took a very modestly priced home in a very far away (which is why I called it "crappy") but decent area to live in. We didn't stretch ourselves to get something better than what we thought we could afford, we skimmed the bottom of the barrel and came up with a house that did not entirely meet our needs, but we thought it would suffice for a few years.
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Old 10-25-2007, 12:38 PM - Thread Starter
 
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Jennica, I notice that you are multiply distancing yourself from this and your language clearly indicates that you made no serious moves toward getting a job -- you were (notice the past tense) starting (which means you did not actually get into it) the process (a vague term) of looking.


So work during the week.

This is a nonargument if you work during the week.

I'm sorry to sound harsh, but this may be a luxury you cannot afford. Many times, your words and general tone suggest that you appear to believe that you're above all that has happened to you -- that you can reject landlords who aren't "worthy" enough to rent to you with your (hypothetical) foreclosure, or that you shouldn't have to live in your "crappy" house and "crappy" area, or that in a time of serious financial crisis when what you're facing is a foreclosure (or at the very, very worst, homelessness), you are entitled to "fun or weekend activities" when your family's security might depend on your decision to hang tough and take responsibility and do what you can.

Again, I'm very sorry for what has happened to you. With all the gentleness I can muster, can I offer you a definition here? An irresponsible person does what she wants. A responsible person does what she must.
I didn't know I'd be judged on the wording I used. I was just trying to explain my position. If you don't agree with it or understand it, fine. But I'm not all the things you are calling me here.
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Old 10-25-2007, 12:40 PM - Thread Starter
 
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Originally Posted by candiland View Post
Putting it up for auction is a really quick way to do away with the whole headache. Your Realtor can give the listing to the auction house if you're already in a contract with him/her. You probably won't get as much as you want for it, but with a really good auction company who advertises really well, it should at least attract several bidders. (I'm a Realtor and just helped out with one of these recently).
Is this the same thing as a short sale?
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Old 10-25-2007, 12:48 PM
 
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Hey, Sleepless -- I have a new job for you.

Mortgage Doula.

(Seriously, we need mortgage doulas in this world!!!)
finally a job I can handle!

BTW, at auction the house will bring 50 - 80% of market value, maybe less. The auctioneer will charge 10% commission. And the contract with the real estate agent will have to be canceled first.

IF the house is sold via short sale, there in nothing to prevent the poster from making future payments to the mortgage company, IF she wants to. For example, if the bank looses $30,000 on the house, she could offer to make payments of $143 per month for 30 years, to pay this off. This ASSumes 4% interest. This is less than the gas cost of continuing to own the house.

In general, mortgage companies do not bother asking for/ pursing this kind of settlement. They just write off the losses and move on.

Her winter heating costs will be well over $1000. Have you done the exercise of making a budget for the two living options? Escaping from this house before the winter heating season might be a good idea.

Keep house: Apartment in city:
mortgage and taxes $ xxxxx rent: $xxxx
heat
electricity
trash, sewer, water, etc
gas and car repair
food
etc.

Does moving back to the city FIX the cash flow problem? How big are the savings? There has been inflation in heating costs, gas, food in the past few years, you need to make sure that the problem is your house, not current income.
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Old 10-25-2007, 01:08 PM
 
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Thank you! This is what I was trying to say. It isn't a $200.00 a month increase, it is much more than that.

But didn't you also did say that if you refinance to a fixed rate loan, it is $200 more than your original payment, which is less than you are paying now on the ARM? Maybe I'm confusing 2 different threads.
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Old 10-25-2007, 01:46 PM
 
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She said that as long as it is on the market, they can not offer me anything in order to stay in my home.
How about taking it off the market? Can they readjust? Then you can always put it back on afterwards??
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Old 10-25-2007, 02:35 PM
 
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Oh God, it was never new and shiny.
I meant that figuratively, not literally that it was new and shiny. (sort of like how my kids are completely enamoured with a "new" toy from the consignment shop for the first week, adn then it gets tossed aside. They toy was "new and shiny" to them at first.)

Quote:
Yeah, we were idiots. We made a huge mistake. We figured that out right away and we've living here for three years trying to make it work ever since. But thanks you two for rubbing it in.
I'm sorry if what I've said feels like I"m "rubbing it in." That is not what I am trying to do at all.

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No way. Now that is uncalled for. We have never, ever, in our lives payed a rental or mortgage payment late, nor have we payed a credit card late, nor a utility bill unless it was a total accident, which happens to us mortals. I have a long credit history that I can point to. Anyone who wouldn't look at the whole picture is not worth renting from anyway.
I'm sorry, I think you mistook what I was saying. Iw asn't saying that you wouldn't pay the rent, only saying that a potential landlord could look at your credit (which, regardless of how good it has been in the past, will be seriously destroyed with a foreclosure) and think "They didn't pay their mortgage, why would they pay their rent?" And with the way the economy is going, virtually every landlord I know (both here in Philly and back where I grew up in NY) are pulling credit checks and won't rent to those with poor credit scores or "dings" like repossesion, foreclosure or bankruptcy. It's just the way the world works, and I think that if you try to limit to renting from those who on;y look at the "whole picture" you will most likely wind up renting from slum lords who don't care.



Yikes, I didn't know this either.



Thanks for the advice. We obviously could not afford the loan initially (but we didn't know that at the time) and had trouble paying it right away. It has steadily gotten worse.[/QUOTE]
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Old 10-25-2007, 02:38 PM
 
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So, what do you all think? Should we do a quick sale or no? I guess our options are to do the quick sale, or for me to get some type of job and make it work here for at least another year. Not sure what I want to do yet. I'm going to talk to DH tonight about all this.

Don't be mean now, this is stressfull.


I think this sounds like a good option (the quick sale) - make sure if you don't make your mortgage payment for a month you put as much as possible of your usual payment somewhere safe so you can use it for a damage deposit or rent or whatever. Good luck to you and I hope you find a good place to rent back in your old area so that you are happier.

Oh and I will say personally I wouldn't do the quick sale and I certainly wouldn't foreclose, as I would prefer to work and use daycare than ruin my credit, although I certainly can understand to some extent why that isn't your preferred choice. Long term credit problems can be so damaging to your future happiness and I don't think it's easy to see now for you, but the time will come when it makes more sense. A lot in your situation may depend on your DH anyway - if he is laid off I think you'll need to just get rid of the house and move back to the city where there are more job options for you both. Again, good luck.

Laurie wahm (virtual paralegal) of 3 wonderful boys (11, 9, 5). 1st by c-section for breech, 2 by VBAC (one miscarriage between child #1 and #2).

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Old 10-25-2007, 02:39 PM
 
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I disagree. My commitment to my children is stronger than my commitment to any bank. I would not go to work full-time in a minimum wage job to avoid forclosure.
Wouldn't your so called strong commitment to your children include providing a home for them to live in and food on the table???? Your statement is completey off base, and I take it personally. I would love to stay home with my child, I feel guilty every day, luckily she is with my mom, I am more fortunate than most mothers. Are you saying that WOHM's have no commitment to thier children? I HAVE to work full-time to provide a decent home in a nice neighborhood so my child can grow up in a nice area and not worry about having to get mugged or shot, and have a large grassy yard to play in.... I live in one of the cheapest cities in my area, just so we can have the space we need, which means the school district is the worst, but we have to also send my DD to private school when that time comes, which means having to make the $$$ to be able to do that. Like another poster said, being a good dedicated mom also includes financial responsibility too. Nowadays you cannot put all the pressure on your DH's. God forbid what if something happened to him? We all have to make sacrifices for our families, some are more willing to do it than others.
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Old 10-25-2007, 02:39 PM
 
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I just want to add my experience. We purchased a small house about 5 years ago in a new neighborhood that is FAR away from my current job. Our thinking was that we would be able to sell it in 5 years when I finished school and that it would be better to buy a new house in a new neighborhood than the same amount of house in a not so great neighborhood. We, luckily, have a fixed rate that is low and we are in the smallest house in the neighborhood, which eases pressure.

We tried to sell our house about a year ago with the idea that we would rent till we decided where we want to move. We priced our house so that we would literally walk away with NO money. In one full year, we had ONE showing and ONE offer (separate) that was 30k less than what we were asking.

So, the market is dismal. Dismal, dismal. And I don't like our neighborhood (the risk you take when you move to a developing area), my commute SUCKS, gas prices are rising, because it's a small house it would be hard to have a second kid here, and I just generally don't want to live in Houston and I feel stuck because of this house.

I've honestly had the same thoughts as you (just kind of fantasizing about being closer to work and such) so some of the posts on this thread have been an eye opener.

I don't really have any advice for you. I think that no matter what you do, it's going to be hard. So, I think you need to make the decision that feels the best, even if it doesn't feel perfect (because I don't think there is one).
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Old 10-25-2007, 02:44 PM
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No, you don't want your house to go into foreclosure. I think the long-term costs of letting that happen would be worse than the short-term costs of making ends meet while you get out of the house and into cheaper living arrangements.

I don't see this as an ethical issue: she and her DP are obligated to pay the loan, if they don't they lose the home and face the consequences for reneging on a major financial obligation.

What is and was unethical was banks offering far more loan money than the borrowers could afford, allowing zero-down payments, allowing people to finance 100% of a home purchase. These practices drove up the price of homes, forcing people like the OP and her partner to pay more for their home (and more in interest to the banks) than they would have in a more rational housing climate. It was basic inflation at work: increase the money supply, and prices increase as buyers compete.

I agree buyers had (and have) an obligation to make rational decisions about what they can and can't afford, and to factor in likely increases in the cost of living and changes in their likely income in those decisions. But the banks were wholly complicit in misleading people about "what they could afford" by relaxing the standards and creating new loan products to attract more borrowers.

OP, I'm sorry you are in this horrible situation. I hope you can look into some of the suggestions for bringing in more income to make ends meet while you find a way to get out of the house without going into foreclosure. The suggestion about, essentially, refinancing via student loans -- which can be put into forbearance if absolutely necessary -- seems interesting, but I would consider them a last resort.

You might also consider re-financing WHILE YOUR CREDIT REMAINS HEALTHY (i.e., before you slip into late or missing payments) into a longer term loan. You would pay more interest, but your monthly payment would be lower and protect your ability to meet the obligation. That would give you a cushion of sorts while you sold the house and your DH found work back where you want to live.
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