Anyone going through a foreclosure in Hawaii?

[mililani]

I just moved from Seattle back to Cali. Puget Sound is great! Only when the weather wasn't raining, cloudy, cold... which it was for most of the year! Would only go there for the 3 months of the year it's really nice.

I would say that you shouldn't be too worried about credit issues. I had a friend who got involved in real estate investing in Colorado with her husband. They went in over their heads. They bought several properties thinking they could do well renting them out. Well, things never go as optimistically as you plan them to. They had crappy renters that failed to pay, and it took them several months to evict them and, in that time they got no rent. They ended up drowning in debt and underestimated cash flow. So, they basically walked and declared bankruptcy. I thought bankruptcy would be disastrous for your credit, but she said it was the best thing she ever did. She was so stressed out prior to the bankruptcy, but once they were able to walk away from their debts, they felt much relieved. And, her credit scores are fine now. In the span of 4-5 years, her credit was good enough to buy a place in Arizona.

[Roxy VB]

If you go through a foreclosure it will change your credit rating for 2 to 3 years. But so will a short sale. Restucture may be grueling but so are short sales and foreclosures. There isn't an easy way out and perhaps you should consider the option of staying for 2 to 3 more years. I suspect in 2015 we will be in another high point market (but crystal balls are hard to find)
1) Call your lender and call local real estate agents for recommendations on other lenders who may help you restructure your loan. I've known several people who have had excellent success with this and lowered their montly payments. Stay away from on line scams who offer to do this for you. I've never heard that restructuring your loan will hurt your credit...anyone care to comment?
2) Whether you should struggle through or leave is a personal decision. However, the market in Hawaii is starting to shift slightly. How much you are under the current value and how much you have vested should influence your decision. Can you take in renters/work part time at home by doing day care or do something to squeeze through the time needed for the market to shift to a better position for you? In any event...make time for fun to take down the stress levels with the family. Even if it's hubby napping under the tree at the beach while you and the kids play in the waves.
The Cash for Keys program is generally for renters not the owners. If you foreclose/you foreclose it goes on your credit report.

[sammy008]

This thread is old but I'm curious, has your property foreclosed yet? I only ask because, my last payment on a condo in Maui was three years ago and they say it will take another 2 years for my foreclosure to be complete. Horrible!

[eureka1]

My understanding is that Hawaii, unlike California IS a "deficiency state" where they can come after you for the unpaid balance. I would get a lawyer asap. Good luck.

[whtviper1]

Originally Posted by eureka1

My understanding is that Hawaii, unlike California IS a "deficiency state" where they can come after you for the unpaid balance. I would get a lawyer asap. Good luck.

Hawaii is a deficiency state. It would cost a lot of time and money for the bank to go after you so it doesn't happen very often - but it can happen.

Always better to negotiate a short sale, your credit, while still terrible, won't be as bad. When you negotiate a short sale in Hawaii you also should get in writing that the deficiency is waived.

[Tiger Beer]

Originally Posted by eureka1

My understanding is that Hawaii, unlike California IS a "deficiency state" where they can come after you for the unpaid balance. I would get a lawyer asap. Good luck.

Sheesh, that explains quite a bit of the foreclosing crisis in California.

[whtviper1]

Originally Posted by Tiger Beer

Sheesh, that explains quite a bit of the foreclosing crisis in California.

Also a deficiency judgement can either be by the primary lender or could be a second mortgage note holder. You want in writing none of those entities will pursue deficiency if you do a short sale.

This part is a guess - in Oahu, deficiency judgements are probably pretty rare. There wasn't a massive drop in housing prices like California or Florida which caused people to "walk away" probably with cash in their pockets still. Rather, in Oahu - they simply had no money to pay the mortgage - therefore, the lender isn't going to spend massives amount of money to try to get a judgement that won't get paid. I would think deficiency lawsuits are against homeowners who the banks know have money but chose to not pay the mortgage anyway.