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12-12-2011, 05:22 AM
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Foreclosure
I am looking for the consequences to foreclosure as it pertains to my personal financial situation. I have read two sides to the argument:
1) It will devastate you for many years, you may be sued for the entire debt amount, etc. 2) As long as the rest of your credit accounts are OK, you're in the clear after just two or three years. I have about ten accounts on my credit report. All but one are open or active. All are in good standing - no late payments reported anywhere. I haven't applied for a new line of credit in two years. My problem is with the mortgage. I can afford the home - that is not the issue here. The problem is that I am now in a situation where I may be forced to move out of the home for a year. In this case, I can either continue to pay the mortgage or let it foreclose. If I continue to pay the mortgage, I will have no money for another place to live. So, do I bear it out for a year, or do I give up now so that I can move on with my life? The home has no equity and it cannot be sold (but not because there is no equity). So, I'm interested in understanding the likely outcome of foreclosure as it pertains to my situation. Thanks. 
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12-12-2011, 05:33 AM
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Why can the home not be sold?
Can the home be rented out?
__________________
Did you learn something from me? Learn even more at my blog: Sunk Costs Are Irrelevant
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12-12-2011, 05:37 AM
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Cannot be sold due to a titling issue. The home cannot be rented out.
If the details of the personal situation are needed to gain a better understanding of my questions in the original post, I'll provide them if needed. But left them out deliberately. Thanks for a quick response.
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12-12-2011, 05:46 AM
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I'm curious about the amount of the mortgage and the total mortgage payment. Mostly because you say that you can afford the house, yet apparently you don't feel that you can cut back on the rest of your spending (or even your savings temporarily, perhaps) to save enough money to rent a cheap apartment wherever it is that you'll be living that isn't in your house.
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12-12-2011, 05:49 AM
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__________________
Steve * Despite the high cost of living, it remains very popular. * Why should I pay for my daughter's education when she already knows everything? * There are no shortcuts to anywhere worth going.
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12-12-2011, 06:09 AM
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Alright...
Looking at divorce right now. Still in somewhat early stages, but it may come that in order for this to happen, we will have to separate for a year first. Wife refuses to leave (even when offered cash and continued support) and is uncooperative, and I cannot force her to because she is on the title to the home, but not the mortgage. I am on the mortgage and title. She does not have an income, but also has no liabilities. So, I feel that I am in a real bind here with no easy way out for me. I don't want this to drag out, so if I must, I will simply move out to get the ball rolling. This leads me to the situation in original post. If I move out, I'm still obligated to pay the mortgage. If I continue to pay the mortgage, I have no money for my own place while she lives in the home and gets everything for free. In contrast, I could just stop paying on the home (and utilities), and move on with my life immediately. But at what cost? The home was recently bought, and we've been married just one year. There are other options on the table as well which I am still exploring/considering. I just don't know which option is best. If anyone has a better idea than what I have described, feel free to let me know.
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12-12-2011, 06:40 AM
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Frankly, I think your best bet right now is to consult with a lawyer. If you foreclose on the house and the bank takes possession of it and forces her out (I believe they can do this - a person who is only on the title is just SOL if the mortgage holder forecloses), what will she try to do to you in court? It could get really nasty.
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12-12-2011, 06:50 AM
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She has nothing to lose. I potentially have much to lose, depending on how this works out. I did speak with a lawyer, but I don't know what to expect from lawyers (never had to talk to them before) and this lawyer told me to work out an agreement with my wife and come back when we have an agreement. He didn't offer advise on anything else. I did not find this very helpful. I'm seeing another lawyer later this week, so hopefully I'll get something going with this one. I just hate going through the waiting period and uncertainty right now...
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12-12-2011, 06:58 AM
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You need to consult a divorce attorney ASAP. A friend of mine just went through a nasty divorce about two years ago. Things can get bad, and you need an attorney to handle all of the details so that you can be sure that you can move on with your life with your finances intact.
__________________
MODERATOR Brian
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12-12-2011, 07:40 AM
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Also, do you HAVE to separate for a year before the divorce can be granted? In the state I was living at when I divorced, the waiting period was 2 months.
If you do have to separate for that long - can you be granted a legal separation? Can the judge decide how the house payments can be handled during this time? (I don't know if that's how it works, just asking)
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12-12-2011, 04:11 PM
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North Carolina? Or are there other states that are just as insane?
Oh boy - I agree on the legal advice. What you need is GOOD legal advice.
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12-12-2011, 06:49 PM
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Could you attempt to sell the home right now while you are still living in it? Price it right to sell quickly?
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12-12-2011, 10:28 PM
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12-13-2011, 08:01 AM
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12-13-2011, 09:00 AM
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__________________
MODERATOR Brian
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12-13-2011, 05:43 PM
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12-13-2011, 05:58 PM
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See if you can get a short sale or try to negotiate a deed-in-lieu.
Are you able to list the property for sale? If so I would. Chances are you won't get enough to cover what you owe but if you let your lender know your situation they may be able to assist you with a short sale. You will certainly have a qualifying hardship if you move. If push comes to shove you will need to try and negotiate a deed in lieu. In other words, you agree to transfer ownership of your home to the bank and they agree not to foreclose or evict. You and your wife will still have to move but it helps you out credit wise. Don't be too concerned about your credit for the long term. Most lenders will allow you to purchase three years after a foreclosure. Although it's good that you don't have any other delinquencies keep in mind that not paying your mortgage will have the most impact to your score. I would go to hud.gov or hmpadmin.com to search for HUD certified counseling agencies in your area to assist you in addition to talking with an attorney. Hope this helps!
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