Thread: Short sale then Foreclosure...

This is the second home you've posted about here that you've gotten emotionally attached to. It sounds like you've overpaid, and overspent your budget -- and now you're in big trouble.

In this market you're going to have a hard time selling, and the rent isn't going to cover the mortgage payment -- So you're going to bleed for awhile either way. Question is which would be less painful?

If you move out and rent this house, you need to move into a 500 sq ft apartment for awhile just to be able to afford all these negative cashflowing properties you have. That's a bitter dose of medicine to take

- Hakrjak

Pardon me but why would you refi to make the mortgage payments? If you can’t make the current mortgage payment what would make you think you can make an additional one? Only about 25% of your income should be for your main residence if you want to be able to have a life & do some investing. Is your combined household income 11,600.00 a month clear? If not you can’t afford this house there is no maybe or what if there just is you can’t afford this house. Earn more or spend less or both.

Its time to retreat and regain myself. Will rent somewhere around $1500 rather than be paying $3000. In 5 years i will come back again and be in a better and educated situation. Just looking forward to the future of all this for my family. I'm taking a dive for now and take the blow from all this.

Talkintoy: Not sure if you're married. If so, is the house in the name of one of you (not both). Hopefully so... because if that's the case, only one person gets their credit rating trashed.

My husband and I ALWAYS ALWAYS ALWAYS buy property in one of our names only as sole and separate (necessary wording for community property states). That way only one person's credit rating takes the hit for the loan and if (god forbid) everything went down, only one person would have a credit problem. I've counseled people through my website on how to go through that - if they've got the properties bought right (one name only), keep one person's credit rating intact for the next deals.

Talkintoy,

There are other options to look at here. How much is the payment on your first mortgage? Can you afford just the first? If you can then do not pay the second only pay the first. The odds that the second will foreclose since there is no equity left in the proerpty is very slim. Once your second has gone 6 months with out a payment the bank is forced by FDIC rules to charge the loan off. This when it is a great to to get them to take less than what they are owed.

I hope this helps!

Originally Posted by Talkintoy

Does it make sense to rent like around $1500 to $1700 and and save the rest of money for other things? At least this way i wont have to pay property insurances, taxes etc... I figure rent in 3 yrs for $2900 = $104400! If i rented $1500 for 3 yrs = $54000! If i did this i would save $50400! Thats money i can use for other venture such as business, investment etc... Maybe then i can live below our means and hoping i can come up with something that will give me all the money to even possibly purchase my home in cash! Does this make sense you guys and gals? What are your opinions?

Your numbers here are seriously flawed. Your "projected" savings of $50,400 is based on the fact that you're actually making the $2,900/month payments that you have now. Based on your post, you're not. You're borrowing money you don't have to pay a mortgage you can't afford.

Best to start from square one. Work out a budget and figure out exactly how much you can really afford, then start shopping for a property to meet your needs.

Originally Posted by Diane Kennedy

Talkintoy: Not sure if you're married. If so, is the house in the name of one of you (not both). Hopefully so... because if that's the case, only one person gets their credit rating trashed.

Yes married. 1st and 2nd home was in just my name and our current home is in both of us. I should've just put myself only again, but i thought this was it for us in moving since house, location, etc... is perfect. Its just the damn mortgage.

Went to real estate yesterday to sell all the home and felt really bad specially the prices i had to sell the homes that we thought was really our home but our lives changed as we learned the area more and more.

I meant no harm to my family, but i feel that i failed them. The only thing thats making me strong is looking toward the future for better things and possibly more than what we have now.

I bought our first home so we can have a home and not waste our rent money. It was also affordable even it was 1 1/2 hours away from my work. I suffered this for better future for my family and saw an opportunity (i thought) to buy a Brand new home at 100% no money down financing and refied the first to that ticking time bomb loan. New home area division built and location took a dive so then it was time to move on. Mostly became investments instead of family homes. It was like a ghost town with yard all messed up. School system was bad i noticed since my kids are growing up already and one was in High School. My kids didnt feel comfortable going out having fun with friends since it was mostly hispanic in area and school. (Nothing against hispanic). I knew how they feel since i went to school and area of mix race. They were just more comfortable being around thier race for some reason. Maybe i need to take them back to our country and culture so they can learn where they came from.

So then i took advantage of the market last year 2006 to be in a better location, area, school etc... 2nd home was refied to that loan time bomb once again and did 100% financing on current home but with your typical 30 year homeowner someday loan. It was a great rate 30 year loan. But i thought if i cant even keep up with it in a year what makes me think i can stay that long to make it? It would take at least 10 to 15years to start seeing that money go in the house.

Everything was so nice and it was a relief to get my family out of that city. Then as time moves on i notice we're beginning to sink getting burried since the money that i cant make it in our current home and lifestyle was coming from equityline from 1st(maxed out $64k) and 2nd home (almost maxed out also $18k left from $53k) and needed solution quick. I guess it started when we moved in 2nd home and also moved job to area so i didnt have to commute. My job as a car salesman took me down as i was making commision only. And the owner was the one making all the money cutting all my commision from back end stuff from dealership operation. They gert thier big cuts first then whats left they give me commision on just like the government. If I don't sell no money. I should've not let it get this far but oh well i can't go back now kicking myself. Only thing i can do now be angry and use this against me to puch myself and educate myself (from you guys) Get help (from you guys) be strong (like you guys) successful (like you guys) and gals (nomadjanet, Diane Kennedy etc... of course)

Let me know if I did the right thing to sell all my properties now even its short sale to take the lost. Thats the only thing lurking in my head is if i made the right decision. Dont want to kick myslef again in future.

Thanks again!

Originally Posted by 8 SNAKE

Best to start from square one. Work out a budget and figure out exactly how much you can really afford, then start shopping for a property to meet your needs.

Talkintoy, I agree with Snake, determine what you do based on your budget. I am sorry if my previous post seemed harsh. I just think that many people do not understand how much of their income should go to personal housing. Banks allowing people to borrow so much more than they can afford has given many people a false idea of what they can afford.
If you feel your current employment is a bad situation, perhaps you can find some other method to earn money.
As far as your kids going to school; it is difficult when you feel that your family is unhappy but if they are teenagers, it is also true that they can be moody anywhere. My kids are Anglo they went to school in an area that is 80% Anglo upper middle income in the suburbs & they complained about it all the time that it was to "redneck".
You can be happy any where or sad any where. I went to 11 different schools before I graduated from high school & found a way to be happy at all of them. Teaching your kids that adversity happens and it is how you handle it that makes you who you are is the best lesson you could ever give your children.
Good luck & I'll be rooting for you.
Janet

Originally Posted by Talkintoy

Let me know if I did the right thing to sell all my properties now even its short sale to take the lost. Thats the only thing lurking in my head is if i made the right decision. Dont want to kick myslef again in future.

Thanks again!

I'm a bit confused by your posts. Have you already sold all of your properties or are you just thinking about doing so? Each post that I read seems to indicate one, the other or both.

Originally Posted by 8 SNAKE

I'm a bit confused by your posts. Have you already sold all of your properties or are you just thinking about doing so? Each post that I read seems to indicate one, the other or both.

Sorry about that...I'm confused also. All this things going on at sametime and I don't have much time to actually look at them to see where we're at. Too much time at work i guess.

The sign for all the homes were put up today. First day to try to sell.

Originally Posted by 8 SNAKE

Your numbers here are seriously flawed. Your "projected" savings of $50,400 is based on the fact that you're actually making the $2,900/month payments that you have now.

Actually that's what my mortgage is currently on my home now. Times slow at work i had to get more money to cover my expenses monthly. Thats where i get it most to cover is from equityline from other homes.

Originally Posted by reipro

How much is the payment on your first mortgage? Can you afford just the first? If you can then do not pay the second only pay the first. The odds that the second will foreclose since there is no equity left in the proerpty is very slim. Once your second has gone 6 months with out a payment the bank is forced by FDIC rules to charge the loan off.

My first is $2210. The second is just regular loan and not from equityline. The equitylines came from 1st and 2nd home. My second is just regular loan since i had 80/20 loan. Isn't better to not pay both and use the money to pay back my other debt instead since its headed that direction anyways?

you didnt fail because you live and learn.... now you understand how evaluating numbers is much more important than becoming emotionally attached to the property... But I am afraid you havent learned this lesson yet since you still have fond attachments for the property and rentals from another thread...

learn from your mistakes and move on... a lot of tools are in front of you to enter the fast lane.

btw, try to steer clear of any references to ethnicities or backgrounds... I am sure you offended more than one person here...

good luck

Originally Posted by randallg99

But I am afraid you havent learned this lesson yet since you still have fond attachments for the property and rentals from another thread...

First time going through this...I bought them homes before to live in and not really for investing it just became that after we moved out from them.

Originally Posted by randallg99

btw, try to steer clear of any references to ethnicities or backgrounds... I am sure you offended more than one person here...

My apology to anyone that got offended. Meant no harm about the references. Just better location was more needed to explain instead.

Originally Posted by Talkintoy

Sorry about that...I'm confused also. All this things going on at sametime and I don't have much time to actually look at them to see where we're at. Too much time at work i guess.

The sign for all the homes were put up today. First day to try to sell.

If you're in a negative equity position with all of your homes, how will you be able to sell them? Won't you have to bring money to the table at closing to satisfy the loan balances?

I wish you the best of luck, because this sounds like a tough situation for you.

Originally Posted by 8 SNAKE

If you're in a negative equity position with all of your homes, how will you be able to sell them? Won't you have to bring money to the table at closing to satisfy the loan balances?

I wish you the best of luck, because this sounds like a tough situation for you.

Thanks for the luck as i will need it! Short sale is when bank accepts the offered price than currently owed to satisfy the loan.

Originally Posted by Talkintoy

Thanks for the luck as i will need it! Short sale is when bank accepts the offered price than currently owed to satisfy the loan.

Yes, but has the bank already ok'd the short sale? I don't think you can decide to do a short sale yourself, since the bank is the one holding the note (and owed the money).

Originally Posted by 8 SNAKE

Yes, but has the bank already ok'd the short sale? I don't think you can decide to do a short sale yourself, since the bank is the one holding the note (and owed the money).

I have to get an offer first then i'll send to the bank and if they take it then its a short sale. At least i tried to sell it, if no offer then its goes to foreclosure as i cannot afford to make the payment anymore.