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Old 05-29-2009, 12:03 PM
 
Location: Waterford & Sterling Heights, Michigan
340 posts, read 881,214 times
Reputation: 343

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Ok so you have excellent credit and are barely underwater. I would definetly try not to foreclose or short sale.
If you can live with your fiance for a while and rent your townhouse, even if you are losing some money every month, makes more sense to me.
Once the RE bounces back you will have everything to gain because you do not seem to be that bad in terms of being underwater.
If you were 30 or 40% under then its a different story.

My BIL is in a similar situation. He have lost 60% of his income since the credit mess started. He can't make mortgage payments anymore so he moved with his mom and leased his condo. The rent is not enough to cover mortgage, taxes and HOA but is paying $450 vs the $1800 he was paying before, which at this point is reasonable for him.

He owns 220K and other units are selling for 210K so he is not that deep under, thats why he wants to keep the condo.
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Old 05-31-2009, 10:44 AM
 
975 posts, read 1,621,103 times
Reputation: 524
If your unemployed your lender is not going to work with you on a loan modification. Period, end of story.

If your running out of money stop paying the stupid mortgage. At some point you're just going to run out of money and lose the place anyway unless you get a job soon. So where would you rather be, broke and in foreclosure or something better?

If what you say is accurate and the propert is just barely underwater that opens up options. The lender is highly unlikely to come after you for a deficiency judgement for a small amount. It will simply cost them more to persue it than you owe. Plus, so far banks are not going after judgements on residential properties unless their asset search shows something big in the way of attachable assets of the part of the borrower. By and large though, the banks operate under the impression, and rightfully so, that if you walked it's because you're broke.

Getting another place to live shouldn't be a problem. Look on Craigslist. A lot of the ad's specially say a recent foreclosure is okay.

I wouldn't worry too much about your credit either. The idea that you can't buy a house for 7 years after foreclosure has never been true and that's not going to change.

Good luck.
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Old 05-31-2009, 11:27 AM
 
3,043 posts, read 7,078,794 times
Reputation: 897
I'm generally with the camp that says bail, however I do agree that you may be best off by renting it and taking a small hit (assuming you get a renter who doesn't lose THEIR job). There's also the question of what type of mortgage you have. If it's an ARM you could see adjustments down the line that makes the situation even more untenable. I believe we have about another year of low-ish interest rates before we'll be feeling nostalgic for these days. With that said, I have an ARM and will be adjusting in August. I currently pay 5%. The latest LIBOR rate was at 1.66. With a 2.25 margin my rate will actually go DOWN to under 4%. I am looking to move so I have no incentive to refinance to a fixed loan. I just hope I can get the darn house sold before I get burned.
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Old 06-01-2009, 08:23 AM
 
28,461 posts, read 75,225,965 times
Reputation: 18520
Default Not true!

Quote:
Originally Posted by Traderx View Post
If your unemployed your lender is not going to work with you on a loan modification. Period, end of story.

...

I have DIRECT experience with lenders doing EXACTLY that -- in fact the very definition of "hardship" includes LACK OF INCOME. In cases where the borrower is otherwise not at the the "deep end of the debt pool" a recast that changes the rate and/or length of the mortgage the modification may be EXACTLY what is needed to keep them in their home and current on the debt.

You cannot get a formal REFI without income, but a recast is handled differently.

I have to say that it FAR EASIER to get the modification approved if the loan is held by a portfolio lender, but even the largest resellers have means to work out a mod when it makes sense...
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