Seriously considering home foreclosure

[FoolFromAZ]

My house price has gone down further. two houses across the street and two houses next to mine are foreclosed in the last 2 to 3 months. due to that, price in my area is going down further. house which is same size as mine is being sold for 170K now.. i thot it was around 230 or 240K. other day when I checked, house was listed for 200K and sold for 170K. thats really crazy. similar house was sold for 400K when it was at peak. whoever bought that house got a great deal. I still owe 280K on my home. is this really worth paying mortgage of $2000 everymonth for nothing.

I am thinking of this option. I appreciate the comments from you guys. Currently my house is on my name. My wife is not part of the title. If I let this house foreclosed and buy cheaper house (something where I pay only $1000 per month towards mortgage) on my wife's name.I know ethically its not right. but due to the mistakes of others in my community, I am suffering. I could not refinance my house as I have negative equity. although currently my DW and I are working, so we can still manage to pay our monthly bills. but I cant expect my wife to work for ever. I have over 40K of cc debt, I am trying to transfer the balance to my wife's cc and also trying to pay off faster. my cc apr would go to default of 25% if I had to let my home foreclosed.

advice appreciated.

[jIM_Ohio]

If house is foreclosed, what makes you think a bank will lend you money again?

If you can afford the payments, I would not sell. Selling takes the paper loss and makes it real. If you keep paying the house off, you may never actually lose any money.

[tripods68]

You are not alone for doing this.

Many I know both my neighbors and acquaintances have simply walk out and handed the keys to the bank without even going through the foreclosure process. A buddy of mine, simply walk out the door, took all their stuff and got another REPO home for $200K less which reduced their mortgage by $1500 a month. I certainly don't approved of this act personally, but it has become the "norm" in today's housing turmoil. To them, it just another business "as usual" as long they don't plan in moving or buying another home in the next 7 years. That's how long Foreclosure stays in credit report. Is it justified, probably so if your the one is suffering financially. It's easy to judge someone and blame to "certain" group of people what has happen to the entire financial collapse and the irresponsible our society has become. I'm won't judge you. However, being a family man you have to do the best thing for your family. That i know.



ONe thing have you discussed this with your wife? I think this decision has to be made by you and your wife.

[FoolFromAZ]

Originally Posted by tripods68

You are not alone for doing this.

Many I know both my neighbors and acquaintances have simply walk out and handed the keys to the bank without even going through the foreclosure process. A buddy of mine, simply walk out the door, took all their stuff and got another REPO home for $200K less which reduced their mortgage by $1500 a month. I certainly don't approved of this act personally, but it has become the "norm" in today's housing turmoil. To them, it just another business "as usual" as long they don't plan in moving or buying another home in the next 7 years. That's how long Foreclosure stays in credit report. Is it justified, probably so if your the one is suffering financially. It's easy to judge someone and blame to "certain" group of people what has happen to the entire financial collapse and the irresponsible our society has become. I'm won't judge you. However, being a family man you have to do the best thing for your family. That i know.



ONe thing have you discussed this with your wife? I think this decision has to be made by you and your wife.

Thats what I was thinking exactly. That would reduce atleast $1000 every month. moreover I dont have to worry whether housing market comes back up or not. My rent would be $1000 even if I stayed in the apartment so I dont have to worry about house apreciation.

Yes I have discussed with my wife about this. I have to somehow get rid of my CC debt from my name without that I cant think of FC.

[DebbieL]

I would seriously consider it if I were you. You overpaid at a time when housing went insane and now you are paying the price. Where I live it is insane, so I refuse to buy and have been renting for several years (house prices more than doubled from about 250K to well over 500K average - no way am I paying that stupid price). Once house prices are back in line with incomes here (and this area was always pricey, even at 250K) I will consider buying. Typical household income here is only somewhere in the upper 60K range if that gives you an idea how ridiculously overpriced we are right now. I'm in Canada, and our prices have only begun the downslide this summer. I can't wait to see price cuts like what you are talking about in my area.

[FoolFromAZ]

Originally Posted by jIM_Ohio

If house is foreclosed, what makes you think a bank will lend you money again?

If you can afford the payments, I would not sell. Selling takes the paper loss and makes it real. If you keep paying the house off, you may never actually lose any money.

I am not going to buy it on my name. my wife is not on my current home's title. so her credit history will be clean. but some cc debt.

[DebbieL]

By the way, the fact that you bought when prices were at the top of the bubble was not "due to the mistakes of OTHERS in your community". Nobody had a gun to your head. Did you think that prices would just continue their insane climb forever? People like me could spot what was happening (and the correction that would inevitably have to occur), and chose not to contribute to the problem by buying (and you contributed to the problem by being willing to buy for the inflated price you bought at). You have to take ownership of your own poor decisions. In your shoes, I wouldn't wish to continue a $2000 monthly payment I could be getting the same thing for $1000. You gambled and lost. Houses really don't always go up as the public was being brainwashed to believe.

[FoolFromAZ]

Originally Posted by DebbieL

I would seriously consider it if I were you. You overpaid at a time when housing went insane and now you are paying the price. Where I live it is insane, so I refuse to buy and have been renting for several years (house prices more than doubled from about 250K to well over 500K average - no way am I paying that stupid price). Once house prices are back in line with incomes here (and this area was always pricey, even at 250K) I will consider buying. Typical household income here is only somewhere in the upper 60K range if that gives you an idea how ridiculously overpriced we are right now. I'm in Canada, and our prices have only begun the downslide this summer. I can't wait to see price cuts like what you are talking about in my area.

here house prices in bay area is pretty high. everything is over 500 to 600K. you cant think abt single family home in bay area. I moved to arizona mainly due to cost of living and to buy house. I bought it for 315K which is slightly above average here in arizona as I was making about 85K then, thought reasonable for that price. I feel I should have gone for around 250K or less than that. that way the difference between apartment rent ( around $1000 for a 2 bedroom apartment) and mortgage payment for the house (which is $2000 that I am paying now) would have not been high. As I had lived in bay area before moving here, I thought 315K for single family detached house in arizona was not bad. anyway currently the same house is being sold for 170K which is really killing.

[kork13]

I'm not knowledgeable enough in how real estate works to make much of a recommendation... but is it correct that you would lose all equity in your home if you foreclose? How much equity do you currently have in it? Do you really want to walk out on all of that money? Because if you do it's essentiall a sunk cost, and you could consider it equivalent to renting a place... in that case, $2k/mo is some pretty high rent...

Also keep in mind that it's entirely reasonable (IMO... for what it's worth) that many/most homes are currently UNDER-valued, simply due to the horrendous state of affairs. If I were you, I would reassure myself that over time home values will eventually come back up. Maybe (probably?) not to the level you bought at, but even still, you would OWN your home in the end. Are you happy with the house and the neighborhood? I would avoid a rash decision that you might regret.

[DebbieL]

He has negative equity in his home. It is worth FAR less than what he owes on it. That is the whole reason he wants to foreclose.

[FoolFromAZ]

Originally Posted by DebbieL

By the way, the fact that you bought when prices were at the top of the bubble was not "due to the mistakes of OTHERS in your community". Nobody had a gun to your head. Did you think that prices would just continue their insane climb forever? People like me could spot what was happening (and the correction that would inevitably have to occur), and chose not to contribute to the problem by buying (and you contributed to the problem by being willing to buy for the inflated price you bought at). You have to take ownership of your own poor decisions. In your shoes, I wouldn't wish to continue a $2000 monthly payment I could be getting the same thing for $1000. You gambled and lost. Houses really don't always go up as the public was being brainwashed to believe.

I did not buy it at peak. I bought it at 315K, it went all they way to 400K. If others have not walked away, price of home wud have been around 275K to 300K which is reasonable. I wud not have been worried much. But several people whoever bought it over 350K just waked away. most of them did not put any money down or only 5%. So they just walked away. banks sold those houses for cheaper price. thats how they brought down the Comp. Yeah I agree buying that house for 315K is partly my mistake too.

[DebbieL]

Originally Posted by FoolFromAZ

here house prices in bay area is pretty high. everything is over 500 to 600K. you cant think abt single family home in bay area. I moved to arizona mainly due to cost of living and to buy house. I bought it for 315K which is slightly above average here in arizona as I was making about 85K then, thought reasonable for that price. I feel I should have gone for around 250K or less than that. that way the difference between apartment rent ( around $1000 for a 2 bedroom apartment) and mortgage payment for the house (which is $2000 that I am paying now) would have not been high. As I had lived in bay area before moving here, I thought 315K for single family detached house in arizona was not bad. anyway currently the same house is being sold for 170K which is really killing.

You should have done your homework better before buying in an area you weren't familiar with. I'm sure you would have found that the housing had a tremendous run-up in price from a few years before, and was due to correct - which it has. I doubt if you have seen the bottom yet. Don't be surprised to find the value go lower before this is all over.

I do wish you luck whatever you decide to do. I would probably forclose if it were me.

[kork13]

Originally Posted by DebbieL

He has negative equity in his home. It is worth FAR less than what he owes on it. That is the whole reason he wants to foreclose.

Negative equity simply means he owes more than it's currently valued at, correct? Assuming the housing market rebounds (which realistically, it will over time), it could likely go back to around the $275k-$300k he mentioned.

I guess what I meant to ask is "how much have you paid toward your home?" You said you bought it for $315k, and currently owe $280k. So you've paid $35k toward principle plus (??) in interest? All I'm saying is that if you hold on and don't freak out like apparently many neighbors have, your home's value should eventually go back up. If this is a home you want to keep for a long time (perhaps the rest of your life?), why let current market conditions scare you away?

In my eyes, I just see this as very similar to the people who are jumping ship on the stock market, selling off stocks for less risky investments, or taking it out of the market entirely, even in their 401k's and IRA's! If you plan to keep this house for a long time, would be happy/satisfied in doing that, there's no reason so freak out and abandon ship.

[minnie1928]

You bought the house, then you should pay for the house. You are able to make the payments because both you and your wife are working. Big deal...that's often how it goes! Yes, the house is worth less, but it's a paper loss. If you walk away then you are just as responsible as those others that you mention that are causing you pain from their mistakes.

We are (the US) on the verge of financing a $700 billion bailout. Actions like this only make a bad problem much worse.

Suck it up and accept your responsibilities. No one held a gun to your head to buy the house or the $40,000 of stuff on your credit cards. If it's getting tight, get a second job.

[red92s]

Originally Posted by FoolFromAZ

Yeah I agree buying that house for 315K is partly my mistake too.

Partly?

[Like2Plan]

FoolFromAZ,
Are you having trouble making the payments on the house?

[disneysteve]

Originally Posted by minnie1928

You bought the house, then you should pay for the house. You are able to make the payments because both you and your wife are working.

Suck it up and accept your responsibilities. No one held a gun to your head to buy the house or the $40,000 of stuff on your credit cards. If it's getting tight, get a second job.

I have to agree, unless there is more to this story.

You bought a house at a price you were willing to pay. You are able to make the payments with your current income. Why would you possibly consider foreclosure? I just don't understand how that thought would even cross your mind.

If you were unable to make the payments or you were forced to sell the house for some reason, that would be different, but if you plan to continue living there, you should continue making the payments that you agreed to make. The current value of the house is totally irrelevant.

[noppenbd]

Originally Posted by FoolFromAZ

I am not going to buy it on my name. my wife is not on my current home's title. so her credit history will be clean. but some cc debt.

It is not whether your wife's name is on the title, it is whether her name is on the mortgage. If she is on the mortgage and you default her credit will be trashed. Also, can she even qualify for a loan based on just her income, with all the credit card debt you all have?

If $315K seemed reasonable when you bought the house, why is it now suddenly unreasonable? If you are able to make the payments, I think you have a responsibility to pay your debts. Old fashioned maybe, but this country needs a little of that right now.

[momof1in150]

Are you behind on your payments? It takes a long time for a house to go into foreclosure. You have to be behind for 3-6 months before the bank will start the process. They aren't going to make it easy for you and they shouldn't. You signed a contract with them to pay for the house.

Just because home values are down right now doesn't mean that they will stay that way forever. No one knows if we are at the bottom of the market but many speculate that we are close. You really need to sit tight, pay your mortgage and wait it out like the rest of us.

I understand your frustration because as a Realtor I see everyone's pain and it isn't easy but you need to stop looking at the current value of your home as it is only worth that if you could get someone to buy it at that.

The reason foreclosures are going for less is that they owed less then it was worth. The bank is looked to get back what is owed and people are looking for a bargain.

Be patient and don't be part of the problem. People need to grow up and pay their obligations not look for an easy way out. Foreclosure will effect you for a minimum of 7 years. If you need a new job and they do a background check then you are going to be in trouble as you most likely won't get a job because of the foreclosure.

Good luck.

[FoolFromAZ]

Originally Posted by momof1in150

Are you behind on your payments? It takes a long time for a house to go into foreclosure. You have to be behind for 3-6 months before the bank will start the process. They aren't going to make it easy for you and they shouldn't. You signed a contract with them to pay for the house.

Just because home values are down right now doesn't mean that they will stay that way forever. No one knows if we are at the bottom of the market but many speculate that we are close. You really need to sit tight, pay your mortgage and wait it out like the rest of us.

I understand your frustration because as a Realtor I see everyone's pain and it isn't easy but you need to stop looking at the current value of your home as it is only worth that if you could get someone to buy it at that.

The reason foreclosures are going for less is that they owed less then it was worth. The bank is looked to get back what is owed and people are looking for a bargain.

Be patient and don't be part of the problem. People need to grow up and pay their obligations not look for an easy way out. Foreclosure will effect you for a minimum of 7 years. If you need a new job and they do a background check then you are going to be in trouble as you most likely won't get a job because of the foreclosure.

Good luck.

Thanks everyone for the advice.


I have been paying my bills on time. never late on any of the bills. making monthly payment is not a problem. Its really frustrating to see your house price going down and people in your community walking away one by one.

As I mentioned I am only considering. Just wanted to get opinion from others.

Thanks