Seriously considering home foreclosure

[Like2Plan]

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

[disneysteve]

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]

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]

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

[FoolFromAZ]

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.

I thought we could get 3 bedroom house for 120K these days. That would bring my monthly mortgage payment to less than $1000 and my wife is making 55K so she should be able to get loan for that amount.

[FoolFromAZ]

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.

I agree with you. Its not ethically right to walk away from home just because others are doing. but whole thing is really frustrating.. thats why i was thinking like that. but i dont think I wud do as long as I dont find any problem with this job.hd

[ScrimpAndSave]

I don't think it is ethically right.

You bought it - you pay for it. Or, put it on the market.

[LivingAlmostLarge]

I am unsure what to do. How do you know your wife will get a loan in her own name and how do you know that you will get a 3 bedroom house for $120k? Those are assumptions.

If you can guarantee it, then I guess if it's okay with your wife, you can do it. But realize when they pull her credit and pull yours for loan approval they might see the credit card debt you want to hide.

Also realize that walking away could be hurtful long term. I am not sure but could they potentially come after you after they short sell it? I mean if they foreclose but you have say $100k in a taxable account can they come after the assets?

Someone more versed in real estate will have to answer that. If you want to do this, I would talk to a real estate attorney and ask if they can come after you. And ask if you buy a home before your house goes into foreclosure, what will happen to that current home? And if they can put a lien against you for the balance of the foreclosure.

[disneysteve]

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.

I suspect the folks walking away are in a very different situation than you. They probably can't afford the payments. They may have bought with ARMs or IO loans that are now adjusting sharply higher. Perhaps they had hoped to flip the house or refi before that happened and now they can't sell so they're screwed.

You bought the house. You can afford the house. You plan to remain in the house. Keep paying the mortgage and ignore the folks around you. It doesn't affect you.

[boosami]

In what state do you live? People living in states with so-called "nondeficiency" judgement clauses in the foreclosure law have a loophole that basically allows homeowners to buy a new home while allowing their current home to foreclose. On top of that, it effectively eliminates the bank's ability to sue you or attempt to collect the money.

WSJ Article Link: Some Buy a New Home to Bail on the Old - WSJ.com
Foreclosure Law by State: State By State Foreclosure, Deficiency and Redemption Periods

[momof1in150]

I thought we could get 3 bedroom house for 120K these days. That would bring my monthly mortgage payment to less than $1000 and my wife is making 55K so she should be able to get loan for that amount.

In this market you are going to need a down payment to get into a mortgage. On a $120K mortgage you are going to need a 3-20% down payment. While your wife MAY qualify it is VERY hard to get a mortgage. Even the most qualified individuals are having a difficult time.

[tripods68]

I sense that you "envy" your neighbors in some way for "walking way" from their homes to save money. I suspect you aren't in deep financial trouble either; Otherwise, you wouldn't be late paying bills. That's my psychoanalysis bubble take. Take it for what it is

There's actually a better options. Try to find ways to cutback on your monthly expenses. List your income/expenses. If that means no movies, vacation, or entertainment, or no new clothes for a while, maybe a year or so, your debt (except housing) could be paid off a lot sooner. By then, the "monkey" will be off your back and you can breath a sigh of relief. More importantly you'll have a new perspectives by then. Just try it.

[FoolFromAZ]

I am unsure what to do. How do you know your wife will get a loan in her own name and how do you know that you will get a 3 bedroom house for $120k? Those are assumptions.

If you can guarantee it, then I guess if it's okay with your wife, you can do it. But realize when they pull her credit and pull yours for loan approval they might see the credit card debt you want to hide.

Also realize that walking away could be hurtful long term. I am not sure but could they potentially come after you after they short sell it? I mean if they foreclose but you have say $100k in a taxable account can they come after the assets?

Someone more versed in real estate will have to answer that. If you want to do this, I would talk to a real estate attorney and ask if they can come after you. And ask if you buy a home before your house goes into foreclosure, what will happen to that current home? And if they can put a lien against you for the balance of the foreclosure.

LAL,

Yes those are assumptions. But I thought they are very much possible. 3% down for FHA loan. We can arrange 10K for the down payment, worst case we can borrow from our parents. I think getting 110K loan for my wife should not be a problem. only 4K of CC debt on her name. She has employment history of one year and she is making 55K which will go up once she gathers experience. Finding 3 bedroom / 1500 Sq Ft home for 120K is very much possible in the current market. I see houses even for 100K. lot of foreclosures, some houses are really in good condition when I checked on ZipRealty.com

As I mentioned earlier we were just talking about this. We are just checking what are all the things that we need to consider if we let the house foreclosed.

I understood that there are quite a few things need to be considered by reading others opinion on this.

- I am in to IT. will find any problem with my current job or if I had to look for a new job in the next 7 yrs, will I find problem due to this FC.
- How wud I get rid of 40K of cc debt. Will I be able to pay it off or move some to wife CC and still keep her credit score good to obtain home loan.
- Will I have to pay any tax, etc.,

[FoolFromAZ]

I suspect the folks walking away are in a very different situation than you. They probably can't afford the payments. They may have bought with ARMs or IO loans that are now adjusting sharply higher. Perhaps they had hoped to flip the house or refi before that happened and now they can't sell so they're screwed.

You bought the house. You can afford the house. You plan to remain in the house. Keep paying the mortgage and ignore the folks around you. It doesn't affect you.

Yes Steve. Thats what I have to do. I am just trying to keep all the options open.