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Moved cross country for a new job 5 years ago just as the real estate market was starting to crash. On the advice of a real estate attorney, he said to let our house foreclose rather than to continue paying two mortgages like we had for over a year. Now my family wants to move back to our hometown, but the new house we bought 5 years ago is now worth $50,000 less than what we paid for it.
Has anyone else been in this situation? Is it better on your credit to try a short sale first before a foreclosure? How hard does your credit take a hit if you have two foreclosures within 3-4 years? Staying in our current town is not an option, the job we moved up here for will probably be cut to a part time position or eliminated by June 2011.
Short sales and foreclosures hit you credit in the same way, paid less than owed. Can't tell the difference. However, short sales and foreclosures are treated differently by lenders. You can often qualify for a loan sooner after a short sale than a foreclosure. However, on a short sale, your lender may be more apt to "forgive" the deficiency (the difference between the sale price and the amount still owed on the loan) than with a foreclosure. Emphasis on the "may be more apt" not to be read as "will be more apt".
Moved cross country for a new job 5 years ago just as the real estate market was starting to crash. On the advice of a real estate attorney, he said to let our house foreclose rather than to continue paying two mortgages like we had for over a year. Now my family wants to move back to our hometown, but the new house we bought 5 years ago is now worth $50,000 less than what we paid for it.
Has anyone else been in this situation? Is it better on your credit to try a short sale first before a foreclosure? How hard does your credit take a hit if you have two foreclosures within 3-4 years? Staying in our current town is not an option, the job we moved up here for will probably be cut to a part time position or eliminated by June 2011.
It sounds like you're worried about your credit and the ability to buy yet ANOTHER house?!
Just stop. Stop buying houses.
Get out from under the house you have now one way or another, move where ever you want to go, and then rent a place to live.
Renting is ok. Billions of people do it all over the world living happily. And renting will save you from the debtors prison for which you are now headed.
In the event that it has so far escaped your attention, buying and selling homes is risky, expensive, and ties you to a place you might not want to be.
Become a renter. Move whenever you want, wherever you want. Be happy. Stop taking out onerous mortgage contracts.
It sounds like you're worried about your credit and the ability to buy yet ANOTHER house?!
Just stop. Stop buying houses.
Get out from under the house you have now one way or another, move where ever you want to go, and then rent a place to live.
Renting is ok. Billions of people do it all over the world living happily. And renting will save you from the debtors prison for which you are now headed.
In the event that it has so far escaped your attention, buying and selling homes is risky, expensive, and ties you to a place you might not want to be.
Become a renter. Move whenever you want, wherever you want. Be happy. Stop taking out onerous mortgage contracts.
I have resigned myself to being a renter for the next 5-6 years, my concern is being able to get a car loan and other basic credit. Plus now there are some employers that check your credit history and I would hate for that to affect me or my wife's ability to get a new job.
With hindsight we would have never moved, worst financial decision of our life. We will be paying for this for at least the next ten years.
*I am not a real estate expert. This is based on recent experience from myself, friends and family.
If I were you, I'd look for a realtor in your area that has expertise with short sales. You could call RE offices and ask if they have a person who specializes in this, or look on an mls search engine for short sales that have sold and who listed them.
From what I understand, a short sale will always look better to employers than a foreclosure. It looks like you "tried."
But, from what I've also heard, most mortgage companies will not consider approving a short sale unless you are late on your payments. (But perhaps this has changed as of late.)
A RE expert in short sales can probably tell you if your particular loan is the kind where they will "come after you for the difference" after the short sale. Something to consider.
You might want to also reconsider the idea of car payments. Save up and buy a solid used car.
Debt free = freedom! (Ok, I'm outing myself here. Clearly I'm a Dave Ramsey follower. LOL)
Try not to get overwhelmed. One day at a time! You CAN crawl out of this hole.
Moved cross country for a new job 5 years ago just as the real estate market was starting to crash. On the advice of a real estate attorney, he said to let our house foreclose rather than to continue paying two mortgages like we had for over a year. Now my family wants to move back to our hometown, but the new house we bought 5 years ago is now worth $50,000 less than what we paid for it.
Has anyone else been in this situation? Is it better on you credit to try a short sale first before a foreclosure? How hard does your credit take a hit if you have two foreclosures within 3-4 years? Staying in our current town is not an option, the job we moved up here for will probably be cut to a part time position or eliminated by June 2011.
My $00.02
My name says what I do - in the last three years have spoken to thousands of people about their hardship with their homes, 1-on-1.
After discussing and analyzing a situation -preparing a recovery plan, prioritizing in this order - The Home * Eliminating The Debts * Rebuilding The Credit. Every case has been different. I do not know yours. Your need to look at these three items to determine short term and loan term goals.
1st - the home; in your case since your looking to leave your property, the best way to walk away for your loan is through a deed in lieu. Two things happen concurrently - your lender will try and qualify you for a loan modification, but since you don't make the money to afford your mortgage, you will be denied. There are things you need to personal do to get the results you want. The 2nd thing is a short sale. Your home is required to be listed for three months. After which it does sell. Then you can be released for and clear on the mortgage.
Once you firmly decide to let the house go - you will be questioning whether or not the make to payments. Because you will be getting nothing in return. When you come to this decision, two things you need to consider - what state you are in (Judaical or Non Judicial), what is the amount you own vs the value of the property. These two things will determine how/what your Lender does with your home loan.
Beware on people just looking to do just a short short for you - (if they can sell it in three months - it is the cheapest way, but.....). If the home doesn't sell after three months, and you are behind on the payments. It can continue into foreclosure.
2nd - since every case is different - need to discuss your bills in detail to discuss what options are available to you. I do not want you to consider bankruptcy!! A B/R kill destroy a CR and take many years to rebuild. Only recommend that as a last ditch option.
3rd - rebuild crediting; actually the homer owner does this. I prepare the plan what needs to be done. Years ago I'd fix people's credit as a favor, a few months later that person was right back in the same position. I have learned it is better for the homeowner to do this on their own so they learn what credit is and how to keep it high.
Having a judgment on a CR, will remain there till it's satisfied. Having a Chapter 7 bankruptcy can remain on your CR for 10 years, vs a Chapter 13 for 7 years. Mortgage lates can remain on your credit report for 7 years, but it affect to your score diminishes less every year.
Due to the rules of this forum, cannot publicly list my contact information.
So what about 2 foreclosures? Does 2 foreclosures affect one's credit more than 1?
Quote:
Originally Posted by Modification Specialist
My $00.02
My name says what I do - in the last three years have spoken to thousands of people about their hardship with their homes, 1-on-1.
After discussing and analyzing a situation -preparing a recovery plan, prioritizing in this order - The Home * Eliminating The Debts * Rebuilding The Credit. Every case has been different. I do not know yours. Your need to look at these three items to determine short term and loan term goals.
1st - the home; in your case since your looking to leave your property, the best way to walk away for your loan is through a deed in lieu. Two things happen concurrently - your lender will try and qualify you for a loan modification, but since you don't make the money to afford your mortgage, you will be denied. There are things you need to personal do to get the results you want. The 2nd thing is a short sale. Your home is required to be listed for three months. After which it does sell. Then you can be released for and clear on the mortgage.
Once you firmly decide to let the house go - you will be questioning whether or not the make to payments. Because you will be getting nothing in return. When you come to this decision, two things you need to consider - what state you are in (Judaical or Non Judicial), what is the amount you own vs the value of the property. These two things will determine how/what your Lender does with your home loan.
Beware on people just looking to do just a short short for you - (if they can sell it in three months - it is the cheapest way, but.....). If the home doesn't sell after three months, and you are behind on the payments. It can continue into foreclosure.
2nd - since every case is different - need to discuss your bills in detail to discuss what options are available to you. I do not want you to consider bankruptcy!! A B/R kill destroy a CR and take many years to rebuild. Only recommend that as a last ditch option.
3rd - rebuild crediting; actually the homer owner does this. I prepare the plan what needs to be done. Years ago I'd fix people's credit as a favor, a few months later that person was right back in the same position. I have learned it is better for the homeowner to do this on their own so they learn what credit is and how to keep it high.
Having a judgment on a CR, will remain there till it's satisfied. Having a Chapter 7 bankruptcy can remain on your CR for 10 years, vs a Chapter 13 for 7 years. Mortgage lates can remain on your credit report for 7 years, but it affect to your score diminishes less every year.
Due to the rules of this forum, cannot publicly list my contact information.
So what about 2 foreclosures? Does 2 foreclosures affect one's credit more than 1?
Yes. It will drop your score another 50-100 points. So you would go down to say 550 with first foreclosure. And than 500 with second.
The real problem will be with lenders. One foreclosure can be explained away. The second foreclosure is going to take more explaining.
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2 foreclosures?
