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Old 02-04-2010, 08:10 PM
 
1 posts, read 5,549 times
Reputation: 11

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hello all,

your 2 cents pls.

i bought house in 2004 for $400000 in vegas. 320000 on primary mortgage load 80000 in secondary loan in Wells fargo.

now house worth 180000. have more than 50K in credit card due + car loan, expenses. monthly due 1500 + living expenses + mortgage (2K)...

so for i'm not behind !!!

now i see the dark side ...

called wells fargo... since i'm not behind on payment... they are not ready to help.
should i stop making payment for 3 months then work with them or walk-away ?

i'm thinking of stop making payment and work on short sale. what you think?
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Old 02-05-2010, 09:25 AM
 
Location: South Jersey
322 posts, read 464,675 times
Reputation: 259
Quote:
Originally Posted by brokeinvegas View Post
hello all,

your 2 cents pls.

i bought house in 2004 for $400000 in vegas. 320000 on primary mortgage load 80000 in secondary loan in Wells fargo.

now house worth 180000. have more than 50K in credit card due + car loan, expenses. monthly due 1500 + living expenses + mortgage (2K)...

so for i'm not behind !!!

now i see the dark side ...

called wells fargo... since i'm not behind on payment... they are not ready to help.
should i stop making payment for 3 months then work with them or walk-away ?

i'm thinking of stop making payment and work on short sale. what you think?
Your situation is unfortunate to be sure, the bright side is that you are not behind so your payment history on your Credit Reports are clean. The only Score beating you're taking is on utilization.

I'm not in your shoes so it's not for me to judge actions or motivations, but I do firmly believe that anyone that tells you to walk away from a mortgage unless you absolutely have to is giving you REALLY bad advice. Cable News is a huge culprit for example, I think Suze Orman should be hung upside down by her toes until she admits she has NO CLUE what she's talking about.

If you want to stay in your home, the best advice is be persistant. Banks, especially the Big Box banks, have ZERO interest in being in the Real Estate business. But with the Foreclosure market being what it is, that's exactly where they are.

Pay attention to your verbage when you speak to the Mortgage reps, use language like "hardship", "i want to stay in my home", things like that. If you go to them and say "I bought it for $400k, and now it's only worth $180k so modify my loan", they are going to tell you to go scratch because thats the risk element of any investment.

Good Luck!
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Old 02-05-2010, 02:17 PM
 
Location: Everywhere and Nowhere
14,131 posts, read 26,298,504 times
Reputation: 6816
Walk away. Most economists are advising this now, particularly if you're in a non-recourse state. Call a counselor who can get you through the process. Remember, the govt. gave the banks TARP money to get rid of toxic assets. Your house is one of those. Let them write it off. Until they agree to start writing down principal, the prospect of massive foreclosures is the best thing that can force them into doing this. You'll be doing your fellow man a favor by getting out. The more walk-aways we get, the sooner the system will settle back to equilibrium. We need your money going into the rest of the economy rather than to the banks. There really is no stigma any longer to getting out of a bad deal this way.
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Old 02-05-2010, 02:32 PM
 
Location: Plano, Texas
1,676 posts, read 6,342,020 times
Reputation: 684
Quote:
Originally Posted by CAVA1990 View Post
Walk away. Most economists are advising this now, particularly if you're in a non-recourse state. Call a counselor who can get you through the process. Remember, the govt. gave the banks TARP money to get rid of toxic assets. Your house is one of those. Let them write it off. Until they agree to start writing down principal, the prospect of massive foreclosures is the best thing that can force them into doing this. You'll be doing your fellow man a favor by getting out. The more walk-aways we get, the sooner the system will settle back to equilibrium. We need your money going into the rest of the economy rather than to the banks. There really is no stigma any longer to getting out of a bad deal this way.

Wrong, wrong, wrong. The government loaned banks money, not give, which they are repaying with interest and paying dividends. Many banks have already paid back all the money including the interest.

The process of mass foreclosures as you suggest will bring responsible home owners values down. By walking away he is not doing me or the homeowners around him any favors.


Really no stigma if you foreclose? Wont be able to buy a house for at least 3 years, and that is from the date the lender sells it which could take a full year or so. I would also bet the people that foreclose arent walking around telling everyone had they got foreclosed.
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Old 02-05-2010, 02:36 PM
 
Location: Plano, Texas
1,676 posts, read 6,342,020 times
Reputation: 684
Quote:
Originally Posted by brokeinvegas View Post
hello all,

your 2 cents pls.

i bought house in 2004 for $400000 in vegas. 320000 on primary mortgage load 80000 in secondary loan in Wells fargo.

now house worth 180000. have more than 50K in credit card due + car loan, expenses. monthly due 1500 + living expenses + mortgage (2K)...

so for i'm not behind !!!

now i see the dark side ...

called wells fargo... since i'm not behind on payment... they are not ready to help.
should i stop making payment for 3 months then work with them or walk-away ?

i'm thinking of stop making payment and work on short sale. what you think?

You are in a tough position. Definitely work with the lender first and attempt a short sale. Falling behind on your mortgae will devastate your credit and walking away is even worse. You will not be able to buy another home for at least 3 years from when the lender sells the house after foreclosure. The time from you walking away to a sell might be a year or so. Which will make it 4 or more years before you can get any other financing for a home.

I wish you the best.
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Old 02-05-2010, 03:19 PM
 
331 posts, read 840,952 times
Reputation: 326
Quote:
Originally Posted by VictorBurek View Post
Really no stigma if you foreclose? Wont be able to buy a house for at least 3 years, and that is from the date the lender sells it which could take a full year or so. I would also bet the people that foreclose arent walking around telling everyone had they got foreclosed.
It makes no financial sense AT ALL to pay for 30 YEARS on a house that devalued more than 50%. I would suggest to live there rent free, stash the mortgage payment, insurance and property taxes as a liquid asset and find a similar home to rent, for likely 40% of your previous expense. Given the numbers, I am assuming you can now rent a similar home for $1,200 (probably too high even), whereas you are probably shelling out $3,000 a month now. Stash the extra $22,000 for 10 years and, with minimal interest, you will have about $250,000. Given an appreciation rate of 3% (highly positive... home values are going nowhere anytime soon), you can then pay cash for the same home. Congratulations, you now have a paid off home and do not have to make 20 more years of mortgage payments. Save the extra $36,000 (what would be going to the mortgage payments) every year and, at 4% in 20 yrs, you will have over a million dollars. Granted, I am not taking the benefit of tax considerations into account. With all that interest you are now paying, if you are in the 25% bracket, you are probably saving $5,000 a year. Okay, so it might take you 12 years to pay cash for the same home.

Ask yourself... is the value of having good credit for 3-5 years worth a million dollars? Personally, I would say it is not.
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Old 02-05-2010, 03:46 PM
 
Location: Jacksonville, FL.
2 posts, read 7,757 times
Reputation: 15
Talk to a real estate attorney. Short sale hits your credit score 75-100 points, foreclosure 250-300 points. Fargo won't talk to you because your current. I'd short sale the property and a good r.e. attorney will walk you thru the process.
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Old 02-05-2010, 04:47 PM
 
11,151 posts, read 13,814,909 times
Reputation: 18791
I'd like to remind everyond of the forum's Terms of Service, specifically:

Quote:
Be civil, no personal attacks, flaming, or insults. We may attack ideas (politely) but we do not attack the speaker of the idea. Be careful with your words, there is a point where being direct crosses a line into blunt, in-your-face hostility.
and:

Quote:
Our opinions on a location or issue are just that, opinions. Highly subjective. Personal preferences. Quirks, even. Leave wiggle room for dialogue, others may not see things the same as you, or been there as long as you, and any one of us can be wrong. Pouncing on someone you disagree with runs contrary to the spirit of this board and its members. We are here to help each other.
This forum is not the place for moral judgments. If you'd like to discuss whether short sales and foreclosures are a *good thing*, please head over to the Politics or Great Debates forums. If you're going to participate in this forum, please limit your discussion to the questions being asked, which are financial in nature.

Thank you.
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Old 02-05-2010, 04:57 PM
 
Location: Everywhere and Nowhere
14,131 posts, read 26,298,504 times
Reputation: 6816
So why are many economists now recommending this? Because they realize that nobody should be carrying assets on their books that are worth less than their liabilities. Your money will do more good in this economy by spending on cars, food, college, etc. than paying a bank for an upside down asset. Believe me you're going to see a lot more of this in the very near future. Don't be afraid to walk away from the deal. You're going to come out ahead renting for three years than carrying a bad asset for 30.
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Old 02-05-2010, 05:03 PM
 
Location: New York
2,251 posts, read 4,170,907 times
Reputation: 1607
Quote:
Originally Posted by brokeinvegas View Post
hello all,

your 2 cents pls. i bought house in 2004 for $400000 in vegas. 320000 on primary mortgage load 80000 in secondary loan in Wells fargo. Now house worth 180000. have more than 50K in credit card due + car loan, expenses. monthly due 1500 + living expenses + mortgage (2K)...

so for i'm not behind !!! now i see the dark side ...

called wells fargo... since i'm not behind on payment... they are not ready to help. should i stop making payment for 3 months then work with them or walk-away ? i'm thinking of stop making payment and work on short sale. what you think?
Welcome to City Data

I understand your situation - read a report last month, out of the entire country Las Vegas is to worst with 85% of the properties under water. You have to ask yourself the question - do I want to keep my home, or let it go.

If this is your primary home, where you know the neighbors, schools, stores, location to work, etc. If you are worried about the value, it will eventually come back. Contacting Wells Fargo right now, if your mortgage payment is more than 31% of you income. There is a good chance you will be approved for a loan modification without being late.
Now if your interest rate is below 7%, and/or the payment is less than 31%. This is a sign the mortgage is not the cause of your problems. You lender can reject your modification request.

I have personally seen Wells Fargo mods coming back at 5% fixed for 30yrs, also seen files coming back at 2%,3&,4%,5%-then fixed for the life on the loan (on an investment properties). Also seen files put at 2% for a 40yr term. The main factor is how much income a person has, in relation to their living expenses.

Every situation is different - and each case has to be carefully reviewed.

On the other hand on people doing modifications them selves, hearing rates around 5.5%, a few cases lower. Based on how much income they make. Many people are being rejected because they do not know how to mitigate for themselves.

Right now Wells Fargo is so backed up, they are working on houses the currently have sale dates. It use to be modifications took 5 to 6 weeks, now modifications are averaging 4 to 5 months, it depends on the state the modification is being done it.

Understand your lender is not your friend. Every lender has a bottom line - when an individual contacts is lender, that person's financial situation is extensively reviewed. The mortgage company is looking to squeeze water from a dry rock in an attempt to get money owed to them. There are many ad's saying deal with your lender for loan modifications - who do you think is paying for those ad's.

No one can tell you to go late on your mortgage payments, because it will hit your credit score. Unless you are buying a new car, or shopping for a new car. Maybe you can afford to take a hit on your credit, the choice it yours. It is very easy over a short period of time to heal your score by following a few proven methods. But right now your credit is not your 1st priority, your home is.

Now if you want to let it go - the best way is a deed in-lieu. The encompasses a short sale. After three months the property will go back to the lender and you will have the debt discharged immediately.

If you just do a short sale - if the house doesn't sell after three months, it can continue into foreclosure. Having a foreclosure on your credit report, is compared to jumping of the high driving board into an empty pool - ..."SpLaT"... Your credit score will drop between 250 to 400 points, and can remain there 7 to 10 years.

If you do a short sale before the foreclosure, or your bank does the foreclosure after. You can be hit with a deficiency judgment, which is the difference between what you owe and what it was actually sold for.

In either case they could still sent you a 1099-C, where you could be responsible to pay taxes on the difference to what it was sold for. The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. You need to speak with your accountant about filing for relief from the taxes.

Other than Nevada is a Non Judicial state - meaning all your lender doesn't have to go through the court system in order to get your house back. All the have to do is send you 30 day notice, your house will be auctioned off on the court house steps. I could comment more, but I do not know the specifics of your situation. I sorry if I am being forward with you, just telling you the truth.

Good Luck

.

Last edited by Modification Specialist; 02-05-2010 at 05:12 PM..
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