Foreclosure

Talk to someone from the morgage company-I have heard that you can 'sell' it to the bank basically and you don't get anything but don't lose anything.

I've heard sometimes you can do a short sale too.

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Sharon I know knows about these types of things.
Best wishes.. we'd be in the same boat quickly too if my husband lost his job.

Last year we had the horrible discovery that our house had foundation issues and that it was going to be $20k to fix it. The house was in a neighborhood that wasn't getting better, was supposed to be our starter home and was really small as we just had our 2nd child..anyways..after a ton of research and meeting with some bk attorneys we decided to let the house go. We did have excellent credit so we actually bought another house at a great price and just abandoned the other one. We claimed bk got rid of that house and credit card debt and it is the best thing we ever did. Yes, we will have bad credit for awhile..but we have a house and bought a new car right before we filed so... It might do you good to let the house go..live in it for as long as you can for free and finish school. In your case though..have a plan on where you can live once you are booted out. Even as renters your credit is checked. And you will have to claim bk if you let the house go otherwise you will get 1099'd and pay taxes to the IRS on the difference of the balance of the house. Good Luck..

Hi A.,
9 years ago we lost our business and had to file chpt 7 (I was a sole proprieter...another bad idea). Anyway, we surrendered our house in our bk. it did not go on our credit as a forclosure. I don't know if they still do that but it would be worth talking to a bk attorney about it. If you have a ton of other debt (besides your monthly expenses) and you still cant pay what the bank is willing to reduce the payment to, that's one thing. You could always rent it out if you moved out of state though. Our bk is still on our credit and it was nearly impossible to rent a house, puchase a car etc. with that looming over us for the first 2-3 years. Now I hear it's even worse because the banks have tightened up on lending. If you do claim, just be prepared for a LOT of judgement and challenge afterwards.

Talk to a realtor about a short sale. I'm going through it right now. I'm going through a divorce and neither one of us can afford to keep the house. We owe $114000.00 on the home and received an offer of $105000.00 on the home. Our realtor told us about the short sale saying that the banks will allow a lower price (if an offer is made) and you do not owe the additional money. This does however go on your credit for 2 years. However, I was then told by our bank (National City-They suck by the way.) that we would owe the difference and we would have to pay the diference. I told them that this is not a short sale then. After several conversations between them and my realtor they are finally accepting the short sale the way it's supposed to be done.

Good luck, I know it sucks to be in this position. I'm in it too as I haven't closed yet.

A.- I am so sorry to hear about you and yoru husband. My husband and I went through the SAME EXACT thing last year. We did move out of state. What we are doing with our home in MI is called a short sale. It is basiclly selling your house back to the bank for what it is worth and then taking a settlement for the rest. You don't have to pay the bank anything it is like settleing on a credit card. Only you don't have to pay anything out of pocket. I am working with an EXCELLENT realtor that has the highest percent of successful short sales in MI. If you are interested, let me know and I will pass her info on to you. I know the word Foreclosure is a scary one, but this way, you have another option. I cannot tell you how easy of a process this has been for us, and how much weight it has lifted off our shoulders. I hope everything works out for you guys. If you have any questions, or decide you want her info, send me a messeage, and I will get you what you need!! -Good luck

Is the house in both your names? Do you pay PMI?

First, contact your bank to see if they can work with you. Second, if you do end up moving out of state you can prove "need" and the bank will typically allow you to sell your home for less than than you owe for it. We are looking into the short sale option at the moment as we too are probably going out of state for a job with little chance of selling our home.

Contact your bank about a deed in lieu or short sale. You should also consider contacting a real estate attorney or CPA, because there was legistation that was waiving the taxes you would owe to do this (generally you would be taxed on the loss the bank takes, i.e. if your mortgage is 200,000 and the house is worth 150,000 you are taxed on 50,000). If the tax is not waived, and you cannot afford to pay it, I would go with foreclosure. Generally after about 3 months of non-payment the bank will begin the foreclosure process, if your husband gets a job, I would try to secure a rental or other housing before the missed payments start hitting your credit reprot.

Good luck.

Hi A.,

So sorry for your situation, that's rough. Have you thought about selling your house on a short sale? We are currently buying a house from someone that way. A short sale is much better for your credit than foreclosing. Just an idea, hope that may help you. C.- WAHM 2 kids- 3 1/2yrs old and 22 month old.

Hi A.,
I feel your pain. You and your family are certainly not alone. There have also been a lot of families having to relocate because of the job situation here in Michigan. Have you ever considered a Short Sale instead of a Foreclosure? I understand that you're not concerned about the credit at this time, but down the road the recovery time from a Short Sale is much better on your credit rather than a Foreclosure. Since your financial situation is a private matter, feel free to email or call my cell. I would be happy to discuss your options with you as well as direct you to a website that can further explain the differences between Short Sales and Foreclosures. I believe half the battle is having the knowledge and knowing what your options are. It would be a pleasure to be of service to you!
Have a super day!!!
K. W.
Coldwell Banker Town & Country RE
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www.kathywalls.com
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Servicing Oakland, Genesee, Livingston & Washtenaw Counties

Hi A.,

Sorry to hear about your troubles. One of the most important things to do is contact your mortgage company. See if you can work out new payment terms with them. Also see if there is any kind of assistance you can get from the government. It seems like you have already received some good advice and I hope that your concern about your house will be taken care of.

I wanted to write for another reason too. I used the following website to assist in my job search. www.indeed.com It is a one stop job shopping website. It pulls in all the new job postings from online sites like career building or monster.com, but it also posts jobs found in newspaper, company websites and so on. It keeps updating constantly. Also you have have emails sent to you for particular types of jobs every day. It might be helpful in your husband finding a new job.

Good luck with everything.

Another option is a short sale. Look into that...It isn't as bad on credit and mortgage companies would prefer this route rather than a foreclosure. It is a little harder to do a deed in lieu if you have a 2nd out on your home. If you have a 2nd look into settling the 2nd and then the deed in lieu. We did not know this was an option and we are going through all this right now also. Also it is looking like Obama may do something like any banks that are getting government help have to restructure loans so it is more affordable for home owners. So, try to hold on and see what they come out with. There could be new laws coming out and it could be easier on you for home loss.

Hi A.,

There are organizations out there that can help you. There is actually one through the state of Michigan...I just saw a commercial for it last night. Check out state of michigan website. I'm sure there is something there.

You can talk with your bank, see if there is something you can do ... if they will work with you.

Talk to a bankruptcy lawyer. There are MANY out there who CAN help you.

IF you do have to go into foreclosure, if that is REALLY your last option and you have thoroughly exauhsted all other options... then stop making your payments and don't start again. When you miss 3 payments, the bank will BEGIN the foreclosure process. This can take several additional months. Typically something like 6... sometimes more depending on your home and property. Don't make ANY payments during this time. It just screws up the process.

Essentially, during this time you are living in your house for free.

During the process there will be a period of time where you COULD buy back your house, basically, you pay the bank what you owe them and then you own your house again. It will go to auction, and even after the auction there is a period where you can get your house back.

Keep in mind that this kind of thing will stick with you for about 7 years. But you CAN work past it. I used to be in Real Estate and worked with a couple who had to go into bankruptcy and 7 years later they were looking for a new house to purchase.

Have you thought about renting your house if you have to move? You are right, this is NOT the time to sell. But, the rental market is still viable. Something to think about.

Good luck hon.

I haven't foreclosed but was close to it. Our bank has pushed 6 months worth of payments to the back of the mortgage. That means no house payment for 6 mths. That may buy you some time to find your husband a job. Also you can file for a poverty exemption on your house taxes. We haven't had to pay house taxes for the past 2 years. This really helps!!! You need to talk to your bank. They will help when you tell them what happened. Good luck.

A. G
I feel the same pain you are having, as I've been laid off from my job & I was there 32 years. You may want to reach my school friend, Ralph Roberts. He's had several books out & his latest two deal with foreclosure information & how to save your home. You can ask questions directly on his ____@____.com
Tell him Karen Alexander sent ya. Good luck to you & may God keep us all in his hands.
Oh, I forgot to tell you that he has his own real estate & mortgage business & has a tremendous staff who can & will assist you with your needs.

One other thing that you need to look into is the help that is being offered to reduce interest rates. If you got the 6 months of payments pushed back, a lowered fixed rate interest, and a hardship so you don't have to pay taxes. This will buy you a lot of time.

Here is a website that will give you some definitions of what people have talked about (i looked it up because I didn't know what they were saying). Credit may not be something you care about... but where will you live? If they foreclose you have to move out, and it will be harder to rent a house, if your credit is bad. I wish you the best of luck and am so sorry that you are going through this.

http://www.bankrate.com/brink/news/mtg/20081211-mortgage-...

A.,

Have you looked into Bankruptcy?

Foreclosure should be your last option. See if there are any programs to help you negotiate with your bank to avoid foreclosure. A short-sale is probably the best option. Also start looking for a realtor who is knows about short-sales.

I understand the threat of bad credit doesn't seem important right now, but there may be another way, especially if you have a high interest rate. Here's a website that may have info that could make the process.
http://www.michigan.gov/mshda/0,1607,7-141-45866_47905-17...

Good luck. We're all 1 step away from where you are. The economy is revolving around credit right now, so don't discount its importance to your future.
Here's another article on the topic. It includes a website thats set up to assist forlosure. May have answers for you.
http://www.npr.org/templates/story/story.php?storyId=1895...