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Many people on this board have sympathy for your job situation. No one likes to lose a job/take a hit on income/lose a home.
So there's no issue with having to go through a short sale. You gotta do what you gotta do.
But actions (whether they are of your own doing or just life's circumstances) have consequences.
What posters like Flat2MT and me have problems with are people wanting to short sale and rebuy another home in such a short amount of time.
There needs to be consequences. The issue is a short sale by definition is that you do not have money to bring to the table and therefor "shorting" the lender. That makes you a credit risk because you did not "pay in full" the agreed amount of the loan.
It's going to take a minimal of 2 years, probably up to 5 years before you are deemed a "lower credit risk" to the majority of lenders.
Now you may get lucky because short sales are such a gray area, where the credit reporting agencies may not report your short sale as "account balance 0 but paid less than agreed to".
So while you may have a credit score say in the mid 600s/maybe even low 700s in 4 years, when applying for a home loan, a lender may take a look at your previous mortgage and read that, and start asking questions. At that point, you better start explaining that you shorted the bank. They may or may not deem you a risk at that point.
That's why people with shaky financial histories but are more financially sound now, are sometimes better off going to a local community bank and dealing with them personally. They can give you a loan that stays in house because they can better evaluate you.
Many people on this board have sympathy for your job situation. No one likes to lose a job/take a hit on income/lose a home.
So there's no issue with having to go through a short sale. You gotta do what you gotta do.
But actions (whether they are of your own doing or just life's circumstances) have consequences.
What posters like Flat2MT and me have problems with are people wanting to short sale and rebuy another home in such a short amount of time.
There needs to be consequences. The issue is a short sale by definition is that you do not have money to bring to the table and therefor "shorting" the lender. That makes you a credit risk because you did not "pay in full" the agreed amount of the loan.
It's going to take a minimal of 2 years, probably up to 5 years before you are deemed a "lower credit risk" to the majority of lenders.
Now you may get lucky because short sales are such a gray area, where the credit reporting agencies may not report your short sale as "account balance 0 but paid less than agreed to".
So while you may have a credit score say in the mid 600s/maybe even low 700s in 4 years, when applying for a home loan, a lender may take a look at your previous mortgage and read that, and start asking questions. At that point, you better start explaining that you shorted the bank. They may or may not deem you a risk at that point.
That's why people with shaky financial histories but are more financially sound now, are sometimes better off going to a local community bank and dealing with them personally. They can give you a loan that stays in house because they can better evaluate you.
I totally understand. We dont wanna short the bank. Even moreally, we dont wanna walk away and leave our neighbors with another short sale eto deal with. But dont you think we have suffered enough in our situation? Crime, gangs, foreclosures surround our area now, and people are leaving (foreclosing) all around us and are leaving the neighbors still here to deal with their mess. We are in an area where probably 20-30% of the homes are foreclosures/short sales - it's killing our value. It's like, when is it not worth it to continue paying $1700/mo (on one income) and watch our values plummet as crime increases around us and our area becomes more and more undesirable? My wife and I are natives and we've watched all the foreigners and NY'ers (I'm just saying what's happening - dont shoot the messenger) buy up property and now just walk away because they couldnt flip them before the market collapsed. And now our home and area has turned into a undesirables-filled, short sale and foreclosed-infested area, and now cars are getting stolen and houses broken into... remember in 2006, the area was nice and homes were $300k and $400k.
I'm still wondering about which direction you should go....
You are Florida natives - you knew the lay of the land.
You assisted in building the homes in your neighborhood - you had situational awareness.
You knew the neighborhood when you bought it - you were an informed buyer.
You received a substantial discount from the builder - great deal...at the time.
Would you have bought this house w/o the discount? Would you have even qualified at full price?
You took out a loan and didn't have any skin in the game (to include out-of-pocket expenses which were probably rolled into the loan at 105% loan/value)(regardless of the 'instant' equity at closing).
Now the neighborhood has taken a turn for the worse - you didn't see this coming and it seemed to happen literally overnight.
All the 'foreigners and NY'ers' are the ones who contributed to the decline of the neighborhood - so it's their fault but now you don't have any issues with contributing to its further decline.
You can either be part of the problem or part of the solution - your call.
I ran up my credit cards to the max last year and bought an entirely new high end wardrobe because I hate cheap stuff. The stress of my job caused me to eat a lot of high calorie food and the more weight I gained, the harder it got to get some exercise.
I have suffered enough and the clothes no longer fit. I am going to stop making payments to the CC companies because it's just not fair that I have to pay for stuff that no longer fits.
You can either be part of the problem or part of the solution - your call.
Yeah, we can start attacking the "little people" in all this housing mess.
But this would have never happened if the "big guys' the investment banks didn't start buying all these "securities" and repacking them and reselling them for big profits. And getting them "insured against losses by AIG"
What we had was a massive failure of routine checks and balances.
Flat2MT, you probably heard of this name:
Joseph J. Cassano
He's the one everyone needs to attack. Yep, if you google that name, he's the one who was in charge of AIG Financial products division. He made off like a bandit, while leaving the financial markets to collapse. If AIG, didn't "insure" those counterparties like GS, Credit Suisse we never would have had a problem. Lots of private companies go out of business. But without government oversight, AIG was allowed to tie in a massive web that would cause the whole entire industry to crumble.
My cousin works for a big European Investment bank, they and their US counterparts have this thing called, "IBG" meaning 'I'll be gone". They make there deals, escape with big bonuses and don't look back at the consequences. My cousin is one of the little bankers, his bonus is only around 500k-1 million a year. His "base" is around 150K a year.
I'm sure Mr. Cassano has fulltime 24 hour security of arm guards where every he goes these days. His boss Hank Greenberg is no angel either.
[quote=Flat2MT;11040120]I'm still wondering about which direction you should go....
You are Florida natives - you knew the lay of the land. But bought into a brand new neighborhood in Orlando. We were not from Orlando, we just erlocated there for a job.
You assisted in building the homes in your neighborhood - you had situational awareness. At first, I guess I was blinded by the deal we were getting. At first, the areas seemed great.
You knew the neighborhood when you bought it - you were an informed buyer. See first response.
You received a substantial discount from the builder - great deal...at the time. Yes, great deal. $100k off asking price. In Orlando, this would have bought us a smaller condo.
Would you have bought this house w/o the discount? No. Would you have even qualified at full price? Yes, our income, even at our age, is probably one of the highest in the neighborhood. We werent purchasing houses and cars on credit cards like our neighbors. We are frugal. So we would have qualified, but we personally would have probably chosen to NOT buy at full price.
You took out a loan and didn't have any skin in the game (to include out-of-pocket expenses which were probably rolled into the loan at 105% loan/value)(regardless of the 'instant' equity at closing). The builder/my employer paid our (close to) $10k closing costs.
Now the neighborhood has taken a turn for the worse - you didn't see this coming and it seemed to happen literally overnight. We've been actually wanting to get out of this area for 2 yrs now. We see the writing on the wall.
All the 'foreigners and NY'ers' are the ones who contributed to the decline of the neighborhood - so it's their fault but now you don't have any issues with contributing to its further decline. I've said over and over, we dont want to do this to our neighbors, but we cant get assistance from our bank. And as far the the folks who have been a big part of this mess, yes, that is who it is. I'm not trying to stereotype or whatever, but if I had to be truthful and tell you who all these people are and where they came from, then yes, that's exactly who it is. I tell it like it is.
You can either be part of the problem or part of the solution - your call. Well, we're trying to get help from the bank so we can lower our mortgage payment so that we can rent it out instead of leaving it. Do you think our lovely neighbors are trying this hard and have thought about how they would affect others like we have been doing?
Yeah, we can start attacking the "little people" in all this housing mess.
But this would have never happened if the "big guys' the investment banks didn't start buying all these "securities" and repacking them and reselling them for big profits. And getting them "insured against losses by AIG"
What we had was a massive failure of routine checks and balances.
Flat2MT, you probably heard of this name:
Joseph J. Cassano
He's the one everyone needs to attack. Yep, if you google that name, he's the one who was in charge of AIG Financial products division. He made off like a bandit, while leaving the financial markets to collapse. If AIG, didn't "insure" those counterparties like GS, Credit Suisse we never would have had a problem. Lots of private companies go out of business. But without government oversight, AIG was allowed to tie in a massive web that would cause the whole entire industry to crumble.
My cousin works for a big European Investment bank, they and their US counterparts have this thing called, "IBG" meaning 'I'll be gone". They make there deals, escape with big bonuses and don't look back at the consequences. My cousin is one of the little bankers, his bonus is only around 500k-1 million a year. His "base" is around 150K a year.
I'm sure Mr. Cassano has fulltime 24 hour security of arm guards where every he goes these days. His boss Hank Greenberg is no angel either.
aneftp - no disagreement here on your points
The little guys like us are getting screwed while the banks are assisted - and there is really no trickle down assistance for those of us at the bottom of the ladder.
Except we get stuck with the bills....
On one hand, I have no issue with walking away from ones debts (insert your reasons here) and I will not attempt to qualify what reasons would support this strategy - every situation is different.
We should have never bailed out the banks - sure the pain would have sucked but a $2-$3 Trillion hit to the economy in hindsight is a lot better than the $11 Trillion (and I've read $23 Trillion) hit we are now taking.
One the other hand, I have an issue with some gaming the system and saddling the rest of us with the bill. If one can get away with it once, they'll continue to not accept responsibility for their actions as there are no consequences. Gaming is becoming the rule....rather than the exception.
Eventually the little guys will meet up with the 'Cassanos' of this debacle...much sooner than later if this continues on its current path.
Moved from CT to Florida, waited a year to buy a house. That was in 2005. It was a small, modest house well within our means.
DH lost his job last year when the economy crashed. His company closed suddenly. The county was in a hiring freeze... small companies were closing left and right. He applied for jobs for a couple of months while we lived off of savings, but no offers.
He got a job in Connecticut. We put the house on the market and moved north. The house was appraised for $100,000 less than what we paid. We looked into renting, but would have only been able to rent for $600 less than what we owed as a mortgage payment each month. We would not have been able to afford the mortgage payment plus a new rent up here in CT.
We ended up moving to CT, paying rent, and letting the house go to short sale. Unfortunately, we had to stop paying the mortgage. Finally it sold this past April... for the $100,000 less than what we owed. Although Florida is a deficiency state, the bank agreed to give us a 1099 for the balance of what we owed (and our attorney says that our income is low enough that we should qualify for a tax break on that, but time will tell).
I have not checked our credit scores yet, but I'm sure they're really bad. Before that, they were in the high 600's... 680/690 or so. So not perfect, but not horrible. We are planning to save as much as possible from now until we are able to buy a house again, to have a large down payment available.
People are villifying those who are losing their homes... yes, some people bought outrageous homes that they could not afford, and are suffering the consequences. But in a severe recession, other people have simply had job losses and have lost their modest, affordable houses. We did not do anything wrong. We had about 4 months' worth of savings built up, we could easily afford our house payments, and we had no other debt besides the mortgage and a modest car payment. Sometimes bad stuff happens. That's life. This too shall pass, and eventually we will be able to buy another home. I'm thankful to have a roof over our heads and that my DH has a well-paying job once again. I know that some think we should be wracked with guilt and living in a cardboard box for our "mistake" in... well, I don't know what! For not being as lucky/blessed/"smart" as them, I suppose.
^^^ Thanks for the reply. It sounds like we are in a similar situation as you all were in recently. We haven't done anything wrong. We just watched our income cut into half of what it was, watch our neighbors get thier cars broken into (and even stolen), and watch our area of Orlando turn into Hialeigh (Miami), but here we are trying to do what's best and the right thing to do, and not trying to affect our neighbors. How many of our fellow neighbors who just up and left their homes are going about it like we are? Not many, I guarantee.
We should have never bailed out the banks - sure the pain would have sucked but a $2-$3 Trillion hit to the economy in hindsight is a lot better than the $11 Trillion (and I've read $23 Trillion) hit we are now taking.
I wish it had not been necessary to bail out the banks. Unfortunately, it was. The bail out will likely be substantially less costly than than infusing the FDIC with the cash that would be necessary to insure all deposits.
No one, anywhere, knows how bad it is, including the banks themselves.
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