Losing job, options on keeping house? (Roseville, Folsom: short sale, real estate, foreclose) - City-Data Forum

gotpancit · 12-05-2011, 10:35 AM

I know if I searched I'd probably find my answer, I think, but I'm limited on time here at work.

Anyways, wife is potentially losing job in March and if that happens we can no longer pay the mortgage. I have 2 options running through my head:
1) Will wells fargo do anything to help us, i.e. decrease our mortgage (I have no clue how or why they would do this)
2) Shortsale/foreclose and buy/rent another house in Folsom

My main question is with 2. I'm trying to come up with a time line to make it work. I'm not even sure if there is a loan program that will allow a 2nd home mortgage with say 5% down. If there is, say we skip 3 months of mortgage, will that affect FICO enough to not get approved for a loan on a second home, probably right?

If you have any other ideas, I wouldn't mind reading them. Thanks. oh and yes I will eventually talk to a realtor, loan officer and bank. I just want to make sure I know what questions to ask.

NinaN · 12-05-2011, 11:02 AM

I would not count on WF decreasing your mortgage, but it can't hurt to ask. Don't pay anyone to do this for you, call them yourselves.

If you short sale or start missing payments, you likely won't qualify to buy another home. Some people do a "strategic" short sale and buy something else first before short sale on the old home. The banks heavily frown on this, and now the new lender could get fined for allowing it, so you have to show that you can rent out the old property and cover enough of your costs that you can afford it and the new home.

Best thing to do is start with WF, then go talk to a Real Estate attorney. Many will do a fixed price ($200ish) consultation and it's well worth the money.

cncsmomndad · 12-05-2011, 02:16 PM

Lenders have definitely caught onto the "buy another house before my old house forecloses/short sells" so that won't be an option. If you short sell or foreclose, you'll be renting for a little bit before you can buy again. Why not list it and try to sell it now? Even if your wife doesn't lose her job you can get into a more affordable home and if this situation presents itself again, you won't be as stressed.

gotpancit · 12-05-2011, 04:34 PM

Thanks for the input you two. I wasn't sure if a Real Estate Attorney could tell me what I didn't or couldn't already find out from other first hand experienced people on the internet. I'll give them a try when I hit a wall.

We could start the short sale process now, but I'd like to keep the house if at all possible. It seems like a decent way out except for the fact we wouldn't be able to get a loan for a new house for 2-3 years.

We could keep the house on her unemployment $, but that doesn't sound like fun.

DMenscha · 12-05-2011, 05:05 PM

I think first, I'd have your wife claim as many exemptions on her paycheck as possible. Pocket as much money as you can of the difference for cushion purposes. Cut back now on any unnecessary expenses. If you can still make it on your spouses UI at that point, then you may be able to ride out the storm. With any luck, she may find a new job before the old one goes away.

You don't say whether selling your house between now and then would produce a short sale, but judging by the tone of your post I expect you are in that situation. Talk to a real estate agent NOW about what your home is worth and what you could sell it for.

Good luck to you!

CAVA1990 · 12-05-2011, 05:08 PM

Wells Fargo may very well put you into a loan modification and tack some payments onto the end of your mortgage. Give them a call and see what you can work out.

bradlywhite · 12-05-2011, 06:21 PM

If you can rent out your existing home to cover your monthly payment, then find a cheaper place to rent, you can keep your credit score and your home.

NinaN · 12-05-2011, 07:36 PM

Quote:

Originally Posted by gotpancit

Thanks for the input you two. I wasn't sure if a Real Estate Attorney could tell me what I didn't or couldn't already find out from other first hand experienced people on the internet. I'll give them a try when I hit a wall.

.

Lots of people can give you advice, but things change frequently in this realm. If you decide to speak to a lawyer, DM me and I'll send you a contact in Roseville that some of my clients have used to discuss the same topic and appreciated the advice.

Good luck with everything. I hope it works out that your wife can keep her job or find something new before this all pans out.

NorCal Dude · 12-05-2011, 07:40 PM

Screw the banks, gut the house and take everything of value. Be sure to take the wire too. Hell take the carpets, mirrors and the kitchen sink even if you dont need it. Don't leave those greedy SOB's much of a house.

daddiesgirl · 12-06-2011, 12:19 AM

There's also option number three. . . find another job asap. I wonder why you didn't see this as another option? Is it because you don't think you'll find another job like the one you'll have? Or you think you'll find another job, but won't pay as much? Your are really lucky in the fact that you have advanced knowledge that your job will end soon. Your company at least extended that courtesy and gave you that much advance to look for another job so it does not devastate your lives. Use it wisely and start looking for another job. Most people who lose their homes don't get any notice, just a "look Bob, we have to let you go" notice 15 minutes before they walk you out.

My wife is a loan processor and trust me when I say it is extremely difficult to get a loan these days, even with good credit. If you default, it is very unlikely you'll be able to buy another house with your history. Besides, where will you get the 20% down payment for another home? And if you do have the 20% down for a new home, why not use that money as your emergency fund to pay your current mortgage while you look for a new job?

Unless you're planning a strategic default because you owe more than your house is worth, it is not a good idea no matter how you look at it. And even if it is a strategic default you are planning, there are other considerations to think about such as whether you are able to find a similar home in that area, the travel and expense of relocating, the time and effort in both finding new jobs and a place to live. If I had to worry about finding a new job versus finding a 20% down payment or a new house to rent and deal with a landlord, I will always pick finding a job because it's much easier.

Calling up your bank and getting them to lower your mortgage. . . it's worth a shot, and you just waste your time and your telephone fees, but there are very, very few people who are successful. And even if they are successful, it could take months on end and lots of work and phone calls back and forth for them to do so. It's better you put that same effort in updating your resume and finding a new job.