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Old 08-16-2013, 08:32 AM
 
1 posts, read 4,047 times
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I am new to this forum and looking for a last ditch effort to buy a home before we start renting an apartment. My wife and I have always owned our own home and recently sold our home after almost 5 yrs after the kids moved out and we planned to downsize our home and mortgage. About 4 yrs ago we had a motor home that we attempted to sell and found that we owed too much on. My company put in place mandatory 1 wk a month layoffs for about 9 months and we felt that something had to go. I tried to negotiate with the bank to take a personal loan for the difference if we sold the MH for less than we owed but they refused. We finally felt that we had to turn it in to the bank so they could sell it at auction. This left us with an 18k charge off that should have been about 8-10k if I would have sold it myself. They never pursued it so we never attempted to settle. This year after a refi on our home we decided to sell and sold it in 13 days not realizing that our ability to get a loan would be impossible. We own a rental home that has produced income steadily for 5 yrs so we still have a conventional mortgage on it. Our income is higher than ever in our lives. We haven't missed a payment ever and we are debt free otherwise except for 2 car payments and a Cc that we pay off every month. We have 10k in cash and found a home that is 80k less than the one we just sold. We are frustrated and do not want to rent. We regret the charge off and would not have done it knowing what we know now. We have been told that the bank will not likely negotiate a lesser payoff for the charge off and we just don't have the 18k to pay it off nor do we think it is right that they didn't allow us to sell it for a much less significant loss. We are now sitting with 115k in income looking at a 150k house that we could easily afford and can not do anything about it. Any advice out there? We would even make payments on the 18k if we could but they wouldn't take it off of our credit and it would actually reset for 7 more years.
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Old 08-16-2013, 11:20 AM
 
3,317 posts, read 7,253,255 times
Reputation: 4095
You are going to have to handle the charge off, settle with them, and get a letter specifying that nothing further is due from you and the account is considered paid/settled and closed. This might impact your down payment amount, but it sounds like you have good credit, so you could look at something like a Flex-97 Conventional loan, go with 3% down, have the seller pay taxes/insurance/closing costs, and have a lower-than-FHA Mortgage Insurance component. And with this program, the MI expires when you get the loan balance to <80% of the value.
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