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

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#1 of 256 Old 10-23-2007, 06:06 PM - Thread Starter
 
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I don't know what to do. Dh and I have excelent credit, never been diliquent or late on any payments for anything. We made a big mistake three years ago. We bought a house an hour away from everyone we know, and 30 minutues away from Dh's job. Then gas prices started going up and up and up, and property taxes started rising higher and higher because this is such a growing area :

When we bought the house the lender pushed us into an ARM, so we did it, thinking "well, we'll either sell in three years or refinance when the ARM is up." Not realzing that the housing market was in for a huge downfall.

We saw this coming, the higher mortgage payment, and put the house on the market. We tried selling the house because we were already having trouble paying the old payments and we just wanted to get out of this city and move back to the area where we will be close to everyone again, and not have to pay these gas prices. Also I want to go to school and DH wants to find a new job, and we can't do those things here. DH finds out in a couple weeks if he will be one of the many people at his company to be layed off, so we are holding our breath for that too. We just want to move to the city and rent for awhile so that we can have money to spend on things again.

So, the house payment for next month is $200.00 higher. We literally can't afford it. There is nothing else I can cut out of our budget. We are already selling things on craigslist and ebay ever month to make ends meet, and poor DH is working every Saturday and some Sundays and he works at least an extra hour every day too, just to make ends meets currently. We are literally charging groceries. Every month we run out of money and start charging things, and then our debt is just going higher and higher and our credit card payments and getting higher and higher, and I just can't see any way out of this.

Yesterday we talked about lowering the price on our house to the minimum we would need to pay the realator and then pay off our debt and be done with it. We would make no profit, but we just want out if this situation. Well, we looked online at houses in this area to see if that would make a difference. And, well, no, it makes zero difference. Our house would then be priced 40,000 - 50,000 thousand dollars higher than the much newer, much nicer, bigger houses with more bedrooms. Why would anyone ever buy our house? No one has even looked at it yet and now I know why.

So our only options are these;

1. I get a part time job and work evenings and weekends while DH is home with DS.

Pro: we can possibly make ends meet enough to pay our mortgage. Con: we simply prolong our misery here, our life doesn't move in a forward motion and we don't have the opportunity to meet our goals, and DH and I will never see each other. Also, DH wont be able to work weekends if I do, meaning that I wil have to work about 8 hours and only make what he could in 2.

2. I get a full time job and put DS in daycare.

Pro: we can possibly make ends meet enough to pay our mortgage. We will all be out of the house at the same time, and will see each other at the end of the day. Con: Ds would not handle this well at all due to some things going on with him lately. I would not be able to make a lot of money (that's another story, but I grew up in a religion that was against schooling, so I have no skills), and so about half of what I make would go towards child care. There would be no time for schooling or job hunting, and our life would fall into a two income trap that we would likely not be able to easily get out of.

3. We stop paying our house payments and let the house go into foreclosure.

Pro: We get the he!! out of here! We get to move on and get away from this mistake and start fresh. We will be closer to friends, family, schooling, and job opportunities. We wont be spending as much on gas or other utilities because we will be renting. We can possibly go down to one car. Con: We damage our credit and wont be able to buy another home for at least two years.

So, what should we do? Is this plan really bad? Would it ruin our credit? Would it make it hard to rent, or just to buy? Is there anything I am not seeing, or is this the best way out? :

I just can't believe we are even considering this. I feel like it's so dishonorable or something, but I honestly just want to get out of here and I don't see any way out other than foreclosure. :

Give me your honest opnions.
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#2 of 256 Old 10-23-2007, 06:12 PM
 
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wow, mama, your breakdown makes it look pretty good to just walk away. There have to be more cons? Do you know anyone in "the biz" you could ask?

s: Hope you get out of there soon!
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#3 of 256 Old 10-23-2007, 06:15 PM
 
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Can you rent your home for the same amount as the mortgage payment? Then you could move closer to family and rent while you wait for the market to recover enough to sell.
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#4 of 256 Old 10-23-2007, 06:16 PM
 
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I would look into all else that might be affected with foreclosure. can they seize any other assets - vehicles, savings/retirement?

That's the kind of thing that would worry me.

In this current market, though, you might be able to renegotiate with the lender, though, esp since it IS hard to sell a house right now. . .. have you tried that option - BEFORE you are behind on payments? They might look more favorably on you and your situation.

i hear you on the credit card situation. we are doing that now. it's bad when you're over your credit card limit as well as nothing in checking (we don't have savings). we had unexpected house problems and had no choice but to charge that on top of the 'regular' stuff - namely groceries.

bettyann
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#5 of 256 Old 10-23-2007, 06:16 PM
 
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I have no advice, I just want to say I'm so sorry you are faced with this decision

You shouldn't have any problems renting with a foreclosure, many many people are losing their homes now, most of the rental listings I've seen say foreclosure ok on them.
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#6 of 256 Old 10-23-2007, 06:42 PM
 
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hugs mama! ARMs suck, they're mean!!! How's your credit? Is refinancing to a fixed rate (rates are pretty low right now) an option?

I don't know if this is the best decision, but the guy we bought our house from refinanced to an interest only while it was on the market. It would make your payments really low until the market picked up enough to let you sell. And if it's a growing suburb, you might even make a profit depending on your location.

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#7 of 256 Old 10-23-2007, 08:25 PM
 
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Get yourself to the bank that holds your mortgage, or to whomever you negotiated your mortgage through. Ask to speak to the mortgage consultant who "sold you the deal" or the manager/supervisor. (I really hope you guys went through a bank!)
Then explain your situation and they may be able to help you out, especially if you get there before you start defaulting on payments. Bring income statements and bank statements and your budget, so that they can see the breakdown.

Foreclosure is never a good thing, and yes the housing market right now sucks pretty bad, especially for sellers. Can I ask what part of Minnesota you're located in?
Here's a couple of other options (without going into foreclosure):
  • Find a child to take care of in your home, the extra money could make a huge difference. (Typical rates are $30.00/day)
  • Go back to school, take out student loans and use them to pay schooling, debt and make your housing payments. The interest on student loans is negligible compared to APY on cc and mortgage or second lines of credit.
  • Rent the house, find a rental for yourself and still make the mortgage payments.
  • Rent out a room or portion of your home. Post listing on craigslist, in coffee shops and at the local universities, ymca's etc. Then screen all applicants VERY WELL!
  • Take in a local foreign exchange student for extra money.

Summer: crafty mama to 2 little girls and wife to Bob
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#8 of 256 Old 10-23-2007, 08:56 PM
 
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You don't just get to walk away, though..

Forgiven debt, which is what a foreclosure is, is considered taxable income by the IRS. The lender will sell the house for whatever it can get, and issue a tax statement for the difference. Since you say that your house is 50K more than newer, nicer, houses, figure that the bank will probably get 60 or 70K less than that, and you will be responsible for paying the income tax on whatever the difference between that and your outstanding mortgage is.

And the IRS never forgives anything.....

savithny, 42 year old moderate mom to DS Primo (age 12) and DD Secunda (age 9).

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#9 of 256 Old 10-23-2007, 09:24 PM
 
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Maybe you can talk to the bank and give them the deed in lieu of foreclosure. I just heard on the news that Countrwide Mortgage is going to work with a lot of borrowers to refinance to a lower rate in order to help people keep their houses. I don't know who your lender is, but I imagine a lot of other lenders will follow suit. Give you lender a call to see what your options are. If a lender knows you're in trouble, they generally try to offer options to help if you haven't let the payments get too far behind.
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#10 of 256 Old 10-23-2007, 09:29 PM
 
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Originally Posted by mamalotusyoga View Post
Get yourself to the bank that holds your mortgage, or to whomever you negotiated your mortgage through. Ask to speak to the mortgage consultant who "sold you the deal" or the manager/supervisor. (I really hope you guys went through a bank!)
Then explain your situation and they may be able to help you out, especially if you get there before you start defaulting on payments. Bring income statements and bank statements and your budget, so that they can see the breakdown.

Foreclosure is never a good thing, and yes the housing market right now sucks pretty bad, especially for sellers. Can I ask what part of Minnesota you're located in?
Here's a couple of other options (without going into foreclosure):
  • Find a child to take care of in your home, the extra money could make a huge difference. (Typical rates are $30.00/day)
  • Go back to school, take out student loans and use them to pay schooling, debt and make your housing payments. The interest on student loans is negligible compared to APY on cc and mortgage or second lines of credit.
  • Rent the house, find a rental for yourself and still make the mortgage payments.
  • Rent out a room or portion of your home. Post listing on craigslist, in coffee shops and at the local universities, ymca's etc. Then screen all applicants VERY WELL!
  • Take in a local foreign exchange student for extra money.
Wow! This is good information!
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#11 of 256 Old 10-23-2007, 09:30 PM
 
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From some program I was listening to on the radio said to call your lender and talk to them. They loose money if you go into foreclosure so often time will work to keep you in the home.

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#12 of 256 Old 10-23-2007, 10:33 PM - Thread Starter
 
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Thanks everyone. We haven't missed any payments yet. I called the bank today and after navigating through the automated system I got a real person who transfered me as fast as she could to another real person. That person was not sympathetic at all. She told me that there was nothing that she could do for me since she is a "collection agency". I thought I was talking to the bank She said that I would need to start missing payments before she could offer me anything, and then the offer would be to tack on more money to the current payment in order to catch up, so not such a great offer. She said "I don't know what you expect me to do for you". I told her that I thought that banks were trying to work with people, and she said, "well how, what do you suggest I do for you?" She was very condesending. I said, "I don't know, should I just stop paying and let it go into foreclosure?" and she said, "Well why would you want your house to go into foreclosure?!?" and I said, "um, because we can't afford to live here anymore, like I've been saying." She just repeated that there was nothing she could do for me. Our mortgage was sold to some big bank that doesn't know who we are.

Oh, and we live in the northwest area of MN, about an hour from the cities.
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#13 of 256 Old 10-23-2007, 10:40 PM
 
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When we sold our last home, at a loss, the bank essentially said the same thing. They don't really care and they have no interest working with you.

By the way, congress is looking to change the tax law so that forgiven mortgage debt is not considered taxable any longer.
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#14 of 256 Old 10-23-2007, 10:47 PM
 
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Originally Posted by momto l&a View Post
From some program I was listening to on the radio said to call your lender and talk to them. They loose money if you go into foreclosure so often time will work to keep you in the home.


This is absolutely true; and many of the lenders are now willing to negotiate a new interest rate with you to prevent foreclosure. BANKS DO NOT WANT YOUR HOUSE. It is a nightmare for them.

If they won't renegotiate a rate with you (and I highly doubt that--it's becoming ridiculously commonplace now with so many potential foreclosures that they risk going bankrupt) then you might ask them to "recast" the loan. Recasting is when they take the existing principal and spread it out over a new loan period. So if you were 6 years into a 30 year mortgage, you'd take the remaining balance and spread it out over a new 30-years... essentially starting the mortgage over.

You're more likely to get them to renegotiate the rate. Either is worth a try!!

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#15 of 256 Old 10-23-2007, 10:59 PM
 
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Wow, I learned a lot from this thread! I hear you on the market though. I'm in MN too and it sucks right now.

SAHM to the munchkins (14.5, 11.5, 9.5, 3, and almost 2)
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#16 of 256 Old 10-24-2007, 12:24 AM
 
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YOu need to look into refinancing ASAP. This is really bad for a lot of people right now, many of them much worse off than you are. The biggest mistake people make is waiting until the last minute and then losing their home. If the first person youtalked to at the bank wasn't responsive, call again. And again, and again, until you find someone. Seriously, don't ruin your good credit over this! Fix it now, while you still can.

good luck!
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#17 of 256 Old 10-24-2007, 12:26 AM
 
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Have you looked into refinancing? ARM rates are higher, but a fixed rate loan right now is probably lower than what you have. My SIL bought a house about 2 years ago at 7% and she's being offered a refi that is lower than that, lower enough that the mortgage company is saying she could get several thousands in cash out and also have a lower house payment. I know her credit is not great either....it's not listed on your options, its at least worth looking into to see if you can get a more affordable payment.

While doing that, can you also possibly sell the second car now, and have your DH use public transportation to work?

Another option is to sell the house for less than its worth, which you can do with the banks approval in some cases. But in the market right now, you could have a beautiful, large, NEW house and have it sit for months & months because the market is flooded.
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#18 of 256 Old 10-24-2007, 12:31 AM
 
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make a deal with the bank and do a short sell. most bank wont dock you for it and then you can sell your house for less. you wont come out ahead $ wise but its better then a bad credit score.

i would also think about calling a lender that works with "B" paper loans. there are programs for problems JUST LIKE yours

s this has to be so hard!

Your life doesnât change by the man whos elected. If your loved by someone you can't be rejected... decide what to be and go be it! If your a caged bird brake in and demand that somebody free it.
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#19 of 256 Old 10-24-2007, 12:33 AM
 
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I'm sorry you're in this situation--it sounds stressful.

My opinion: aside from significant tax/credit/financial consequences for you, I simply think that going into foreclosure is unethical if you can avoid it. You were aware of the loan terms when you signed and now, as unfortunate as it is, you'll need to make some tough choices (like working f/t) to make this right.

While I think that some lenders were certainly predatory, I also think that people who took on dangerous I/O or ARM mortgages should accept some responsibility too.
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#20 of 256 Old 10-24-2007, 10:59 AM
 
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I agree in theory with the PPs who say that it is more expensive for the bank if the property goes into foreclosure. However, the reality is that you are dealing with a beaurocracy that won't deal with "Y" until "X" happens. Basically it's an assembly line of paperwork.

Keep in mind that some banks and mortgage companies are probably cutting personnel to make up for their losses due to bad loans. Unfortunately that means less people to actually sit down and analyze your situation and see if you really are on the verge of not being able to make a payment or whether you are just trying to cut yourself a deal.

My father is a lawyer/CPA and tells me that he's had clients in similar positions that retain him to negotiate with the bank. They'll send him a big stack of forms to fill out. Of course if they can't afford to pay the mortgage they can't afford to pay him to help them with the forms. Additionally, my impression is that they don't necessarily process the forms once you fill them out. It's just some pencil pusher's way of buying time before he actually has to invest any energy in dealing with you.

Having said that, I'm sure there are some people out there that have had success in dealing with banks but I think it involves a lot of trial and error and a lot of phone calls and the right personality. Not to mention a little bit of luck. If you're up for it I'd start with the original phone number you had and make sure you don't get forwarded to "Collections". Just keep going up the chain until you get someone that's willing to send you the package of forms my father mentioned. Ultimately you may find out that you have to miss a couple of payments first and then you'll have a tough decision to make.

In the meanwhile have you considered trying to find someone to rent a room from you? And am I safe in assuming that you have tried to re-finance through other lenders?
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#21 of 256 Old 10-24-2007, 11:02 AM - Thread Starter
 
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I'm sorry you're in this situation--it sounds stressful.

My opinion: aside from significant tax/credit/financial consequences for you, I simply think that going into foreclosure is unethical if you can avoid it. You were aware of the loan terms when you signed and now, as unfortunate as it is, you'll need to make some tough choices (like working f/t) to make this right.

While I think that some lenders were certainly predatory, I also think that people who took on dangerous I/O or ARM mortgages should accept some responsibility too.
I see what you are saying. I kind of agree. However, though we did know the terms of the mortgage and agree to them, we also did not know that gas prices would skyrocket, property taxes would inflate adding on hundreds to our house payment over the years, and that we would end up charging groceries. I don't want to add to the problems and I feel it is a bit unethical, but at the same time, I don't want to bust my butt to pay a payment I can't afford. And to what end? How long is this housing market going to be bad? Three years, five years, ten years? Am I supposed to put my life on hold for years and take a stupid job that pays nothing and never see DH or DS, for YEARS, waiting for the market to pick up? This last year has just been so hard. I've been looking for a job, but we live in a small town and there isn't much available. We could make it work, but it's just really depressing to think about that life that I would need to keep up for an indefinate amount of time.
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#22 of 256 Old 10-24-2007, 11:08 AM - Thread Starter
 
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Our mortgage was locked in at 5%, so if we refinance, we will end up with lower payments then the increase with the ARM, but higher payments than our original ones. Also, property taxes keep going up, and gas prices do to. It seems like we can just never get ahead. So refinancing could be an option, to proivide a bit of relief for the moment, but how long can we make ends meet like that? The payment would still be about $200.00 higher than our original payment was.

We can't sell one of the cars because there is no public transit from here to DH's job. MN public transit sucks. He car pools right now, so only drives two or three times a week, which has helped. Besides, it is not a huge expense to keep both cars because they are both payed off, so we don't have any car payments. Our plan was to keep them both until they stopped running, since that would get us the most for our money with them.

Also, we are going to look into a guick sell. We just found out about that last night from FIL. I'm going to call the bank again today and see if I can talk to someone who cares. Not likely but I'll give it another shot.
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#23 of 256 Old 10-24-2007, 12:01 PM
 
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If your going to look into selling the place, at least TRY to renegotiate the rate or recast the loan first. You have nothing to lose. The pp is right in that you'll need to speak to someone higher up with the authority to actually do that. Start off by asking to speak to a supervisor. Be polite to the rep--ask them if they have the authority to renegotiate the terms of your loan. They'll likely say "No" and then ask to speak with someone that has that authority. You're right in that stuff keeps going up, but you would at least buy yourself a year before property taxes increase... at which time the market is likely to get better (it's been predicted to recover in late 2008/early 2009 for many of the markets in the country).

You would kick yourself if you let your house go before exhausting EVERY other possibility... right? Have faith. Know that if you persist long enough, you'll find a way to keep it. Many of the banks are renegotiating terms. They have way too many people like you on their hands. They are as nervous about it as you are. Granted, there are some banks that won't talk about it UNTIL you're in foreclosure; but foreclosure is a long process (here in NJ, the average time from foreclosure beginning to leaving your home is 18 months--and it has nothing to do with the system being backlogged). My neighbor went into foreclosure and the second he got the letter, he found out he could liquidate part of his 401k without any penalty. So he did that and they now have their home and are getting back on their feet.

Just keep on with it. You will find the answer. There are lots of good options here that include keeping your home.

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#24 of 256 Old 10-24-2007, 12:22 PM - Thread Starter
 
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If your going to look into selling the place, at least TRY to renegotiate the rate or recast the loan first. You have nothing to lose. The pp is right in that you'll need to speak to someone higher up with the authority to actually do that. Start off by asking to speak to a supervisor. Be polite to the rep--ask them if they have the authority to renegotiate the terms of your loan. They'll likely say "No" and then ask to speak with someone that has that authority. You're right in that stuff keeps going up, but you would at least buy yourself a year before property taxes increase... at which time the market is likely to get better (it's been predicted to recover in late 2008/early 2009 for many of the markets in the country).

You would kick yourself if you let your house go before exhausting EVERY other possibility... right? Have faith. Know that if you persist long enough, you'll find a way to keep it. Many of the banks are renegotiating terms. They have way too many people like you on their hands. They are as nervous about it as you are. Granted, there are some banks that won't talk about it UNTIL you're in foreclosure; but foreclosure is a long process (here in NJ, the average time from foreclosure beginning to leaving your home is 18 months--and it has nothing to do with the system being backlogged). My neighbor went into foreclosure and the second he got the letter, he found out he could liquidate part of his 401k without any penalty. So he did that and they now have their home and are getting back on their feet.

Just keep on with it. You will find the answer. There are lots of good options here that include keeping your home.
But I don't want my home! I hate this house, I hate this area, and I hate being trapped here!

If it is true that the market will recover that soon, then maybe it would be worth staying. It just doesn't seem like that because the market is just steadily declining and so many people are foreclosing that it seems that that will disrupt the economy in general, which will make it less likely that people will buy houses, for a long time to come. Am I missing something?
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#25 of 256 Old 10-24-2007, 12:28 PM
 
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Call your lender, explain the situation, and ask if they're willing to agree to a short sale. Basically, people are finding themselves "upside down" due to ARMs. Meaning they owe more on the house than it's worth right now, even after owning for quite some time. (Sold high in the good market, worth much less on today's market). For many lenders, foreclosure can cost more than simply forgiving the outstanding debt due to this problem. You'd still sell, obviously, but that's better than foreclosure. Call and try to arrange something like this. Many lenders have new "short sale" depts. for exactly this reason. It's more and more common. Good luck.

ETA: I see someone already talked to you about this. You're right... it's worth a shot!
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#26 of 256 Old 10-24-2007, 12:31 PM
 
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OH!! SORRY! I didn't realize you were miserable there! LOL!

Then maybe it WOULD be best to just be out of there if only for your mental health.

Nobody KNOWS when the market will recover. The economists can "forecast" which is nothing more than an educated guess. And truly, even the forecasts are very specific to where you are. Where are you?

Our brokerage attends an excellent market forecast twice/year with a firm that has been dead-on for many years. So I know what they think for where *I* am (in Central NJ) and how things are affected... but it differs even by the county. And even then, things happen to our country and economy that change the forecasts.

It's a guessing game. Educated guessing, but guessing none-the-less. The thing about real estate is that at some point, it recovers. It's just a matter of how long it takes and whether you can wait it out. If you're unhappy, it's not worth it. I'm not saying to go into foreclosure, but certainly get out.

Sorry for the misunderstanding! :

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#27 of 256 Old 10-24-2007, 01:24 PM
 
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I'm in the tough love camp here. I know what it's like to be living in a place you despise, and I've had to take the job I despise in order to make ends meet.

But I'd still figure out a way to keep from going into foreclosure because of the long-term tax and credit effects. Talk to a lender about refinancing.

Also appeal your property tax assessment. The taxable value of your home should be based on its value now, not what it was at the peak of the market. Review your homeowners and car insurance. The last time we shopped around for homeowners, we cut our yearly bill for that in half.
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#28 of 256 Old 10-24-2007, 01:33 PM
 
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Originally Posted by jennica View Post
Our mortgage was locked in at 5%, so if we refinance, we will end up with lower payments then the increase with the ARM, but higher payments than our original ones. Also, property taxes keep going up, and gas prices do to. It seems like we can just never get ahead. So refinancing could be an option, to provide a bit of relief for the moment, but how long can we make ends meet like that? The payment would still be about $200.00 higher than our original payment was.

I think that anytime you sign a loan contract on a house, there is no way of knowing "for sure" that gas prices & taxes won't skyrocket, that the economy/housing markets won't tank, etc. It's one of those leaps of faith you take on an investment.

However, I also think that anytime you sign a contract its reasonable to expect that prices of things will go up to *some extent*, and $200 a month is within the scope of reasonable on a purchase as major as a house.

For me, it would be easier to scrape together another $200 a month from the original payment, (but still less than you are paying now,) than it would be to deal with the frustration of trying to rebuild my credit for 7 years, or trying to buy a house again in 2 years with rotten credit which will equal very high interest rates. You could very well end up buying another house in 2 years and paying as much as you are now for a smaller place, simply because even if prime is at 5% 2 years from now, you won't qualify for it with a foreclosure on your history.

Long term I think to refinance would be the better option, even if its temporarily for a couple of years until you can sell to find something cheaper or while waiting for the market to pick up again.

Foreclosure sounds like the easy way out right now, but I don't think in the long run it really will be.
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#29 of 256 Old 10-24-2007, 01:48 PM
 
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I am sorry you are so stressed about this. That is a tough situation. I know you can never predict the future. It is tough being away from family. I moved away from the city to be with family so they could provide daycare for me. My mom takes care of DD while I work full-time. If I didn't work full-time I would be in the same boat as you. You can always look at it as a temporary solution until you get out of this mess. REMEMBER: this is all temporary!

I would not go into foreclosure. Especially if you have good credit. It effects you more than just 2 years. I would GO to the place where you originally got your mortgage and speak to the person who helped you. Most financial experts say if you are having problems making payments, then talk with someone at the institution immediately BEFORE missing any payments and they can usually work with you. They can maybe let you miss a couple payments, or a forebearance, ask them if there is anything they can do for you. I would not talk with someone from a collection agency. You can also talk to a different bank about refinancing. The rates in MA are about 6.25% right now for a fixed rate. Some banks even offer 40 year loans and maybe able to buy you some time until the market turns around. Someone else also suggested the interest only loans as well. Not the best thing, but maybe able to buy you some time until you can sell.

You can look into what the rents are for that area, and see if you can rent out your house and move back closer to family/friends. Maybe your family/friends can take care of your DS while you work and catch up. Do you have an extra room you can rent out and take in a roomate? I like the idea that someone suggested taking on childcare out of your home. That will definitely cover the extra expense for your mortgage and give you a little $$ to put towards your groceries. You can work and still be able to stay at home. Maybe you could get a job in a daycare as an assistant, that way you can be with your son.

I know this is becoming a national problem and I think there has been some federal legislation that has recently passed to fund all these foreclosures so the economy doesn't nose dive.

I found this when I did an online search

http://www.ucma.com/ They have a free consultation, it can't hurt!

http://www.hud.gov/foreclosure/index.cfm

I understand it sounds so easy to just walk away, but I would exaust all other options you can first.

Goodluck and keep us posted.
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#30 of 256 Old 10-24-2007, 02:03 PM
 
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...
Also, we are going to look into a guick sell. We just found out about that last night from FIL. I'm going to call the bank again today and see if I can talk to someone who cares. Not likely but I'll give it another shot.
Selling a house quickly means pricing it correctly. I suggest you invest some time in trying to find a good realtor and getting several recommended sale prices based on "comps" (comparable houses) in your area. Once you are reasonably certain you know what the house is worth (based on square footage, number of bedrooms and bathrooms, size of the yard, location, etc.) price it on the low end. You want to attract as many potential buyers as possible as quickly as possible with a price that is almost too good to be true. You should consider "rounding down" to get it into a range that's perceived as affordable. Kind of like stores do ($1.95 instead of $2.00) but on a larger scale. A good realtor should be able to help you figure out what the "sweet spot" is. As an example, there may be a dramatic difference between $151,000 and $145,000.

Make sure you know what you are getting for their commission and that they will market it properly. You want it on the Multiple Listing Service (MLS) which increases the chances that they'll have to split the commission but gives the house much more exposure in the market. Speaking of MLS, try visiting "Realtor.com" so you have an idea going into it of whether the realtors' comps are on target. It can be hard to tell what is near you but if you study the listings oftentimes the clues are there. I live in a small town but some neighborhoods are better than others, I can usually tell where something is if they mention the grade school or middle school.

Also make sure you know how often will it be advertised and how. Will it be in the papers or in the TV listings? Make sure this is included in the contract, don't just take their word. Also consider negotiating the length of the contract. If they aren't doing a good job you don't want to be stuck with them. Also, it doesn't hurt to try and negotiate the commission.

Start decluttering now and if the house needs any inexpensive work at all (e.g. mainly elbow grease) start with that now. Curb appeal is critical so start tidying up the yard if it looks a little run down. If you have an attractive recent picture of the house in the Spring or Summer that might look better in a listing unless you still have some leaves on the trees and the Fall color is coming in.

As far as contacting the bank, if they are local or if they have a local branch I would try visiting instead of calling. It's a long shot but you may have better luck that way.

I hope some of the PPs are correct and that the bank is willing to negotiate. I understand that you want to get out of the house anyway but if you can reduce your monthly payments and buy yourself some time you may buy yourself some time to sell the house on more favorable terms.

Finally, a last ditch suggestion would be to rent it out if you can do so for an amount that would cover your mortgage and taxes. If you can find a cheap or free place to live (perhaps with a friend or relative) you may even be able to save some money.

I wish you the best of luck and FWIW I commend you for taking the bull by the horns rather than playing "wait and see".
~Cath
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