Foreclosing in CA, Moving to OR-help (Portland, Keizer: short sale, real estate, apartments)

[jojonow]

Please don't turn up your nose at me just because I'm a So Cal Gal...I've always wanted to live in the Pac Northwest. My husband is born & raised outside of Portland, his father is dying, we are sick of the CA rat-race. We want to live a greener, more meaningful life.
So we're re-locating to the Mid-Valley in the spring.
We can't sell our home now, so are having to walk away.
This will trash our prevously PERFECT credit! If we can't negotiate down our 2nd, then we will have to BK just to get out from under it. A gloomy but maybe necessary prospect.
We have good documentd income for last 5 years (over 150K). Can't save a penny here, though, and want our money to go farther.
We would like to rent a large home (for our home-based businesses), like 2000sf or so in the Mid-Valley.
We have excellent references, dogs but no kids.
Real estate folks, will our damaged credit be a big problem in leasing? We can come up with deposits, we're looking to pay between $1500-$1800/month, prefer a home with trees, gardening possibilities, but doesn't have to be "new" or fancy.
This is very difficult time, so please folks, no Cal-trashing. okay?
We are really looking forward to changing our lives for the better.
I've never experienced "seasons", my husband thinks I won't make it since my normal attire is flip-flops and tank-tops 11 months out of the year. But I'm looking forward to getting a Land's End catalog and some hiking boots!
Thanks for your input!
jojonow

[scone]

No Cal-bashing from me.

But I'm curious, why would someone making $150k (per year, I presume), with no kids, find it impossible to save? And why do you feel you must foreclose? I can understand why your husband would want to take care of a sick parent, but how does that necessitate bankruptcy? I'm having trouble putting together the whole picture here.

[Bendite]

I'm not a realtor, but I think that every leasing company is going to do a credit check. I'd call one of them in the area you plan to move to and see if a foreclosure is going to have an impact on your ability to rent and what steps you can take to improve your chances. Renting from a private party might not require a credit check (they may not even know how to do one). By no means should you rent from someone listing on Craigslist unless you do your own checking about who actually owns the house. There have been a number of people scammed recently.

[Venusian_Artist]

I'm assuming that if you're ready to walk away, you've already contacted your lender(s) and attempted a short sale and/or deed in lieu of foreclosure? If so, then you've probably got a pretty good hardship letter sitting in a Word document somewhere.

Make several copies of that, bring it with you to fill out rental applications, and make sure you've also got some copies of your credit score pulls, documenting your "perfect credit," from before you started missing payments.

Explain to your landlord/leasing company, with supporting documentation, your situation and how you're a "safe bet" tenant-wise. Then offer to pay three months rent up front as part of the security deposit.

Some leasing companies and corporate-owned apartments may turn you away, but individuals will be more sympathetic, and will jump on the cash. And even in the former case, some will put less weight on deliberately missed home payments, and care more about missed rental, car, or credit card-related negative taglines on credit.

You have to recognize that voluntary foreclosure is so common right now, that a significant number of tenants in rental units are in the same boat as you, and companies now have procedures for dealing with them. Foreclosure doesn't mean what it used to.

How do I know all this? 'Cause I just went through the process myself.

[Arf Arf]

First off, people, it's NONE of our business what their financial situation is. She didn't ask us to ask why they are where they are so lay off.

I would say pretty much any community is going to meet your criteria. You'll probably want the suburbs. Consider Canby, Newberg, McMinnville, Keizer. Good luck and welcome.

[jojonow]

Thank you everyone who replied with advice. Scone, in answer to your question, California is very expensive. Our mortgage is $4000 a month. We've been making all our payments on time, but it has been stressful. We have 1 old car between us, I shop at Old Navy and we don't eat out much. This was our first home, we did not know that upkeep would be so expensive, and had a remodel project go wrong (that was supposed to gain us equity, before the bubble burst.) Stuff is just expensive, and we run our own business so have some overhead there (4 phone lines, electrical $400 a month, healthcare, etc.) Arf Arf, thanks for defending me, though! That felt good!
Venusian Artist, these are good tips. I already have my previous landlord of 7 years willing to attest that we were dream renters; I put a letter together about us, have copied tax returns/check stubs, and have the credit report prior to "walking away". We are attempting a loan mod, but aren't optimistic at this point, and really, just want to make the move anyway. It sounds like you took your own advice, and had some success? That's encouraging! Thanks for the positive role model!

[scone]

Originally Posted by jojonow

Thank you everyone who replied with advice. Scone, in answer to your question, California is very expensive. Our mortgage is $4000 a month. We've been making all our payments on time, but it has been stressful. We have 1 old car between us, I shop at Old Navy and we don't eat out much. This was our first home, we did not know that upkeep would be so expensive, and had a remodel project go wrong (that was supposed to gain us equity, before the bubble burst.) Stuff is just expensive, and we run our own business so have some overhead there (4 phone lines, electrical $400 a month, healthcare, etc.)

It's true, California is expensive, I lived in the Bay Area and L.A., I still have family there. And I know it's stressful, but a foreclosure and moving is also quite stressful. As well as ruining your credit, which might impact your ability to get credit for your business. A decision like this will follow you around for many years.

Then again, while in California "walking away" is becoming more common, it's not quite the same in Oregon. Banks here aren't going to be as understanding as they would be in Cali. And if you can't transfer your business up here you might end up looking for jobs, which are pretty thin on the ground at the moment, and don't pay all that well.

I'm just saying, "walking away" might look like a good option from where you are sitting right now, but you could be jumping from the frying pan into the fire. In other words, you could possibly end up flat broke in Oregon with no job prospects, and a landlord will evict you if you wind up like that.

Whereas, if you can manage to hang on in Cali for a couple of years, you may be able to sell and move, which will preserve your credit, your business, and possibly be less expensive and stressful in the long run. And at least now you have a home, all the necessities, and health care.

If you're having trouble making the payments, you can still hang on to the house for as long as possible, and wait for the mortgage assistance package to get through Congress. That might have something in it for you. But if you can still make the house payments, it seems to me that you could wait this out. Being "upside down" doesn't matter as long as you don't realize the loss, and at least you have a roof over your head.

I know it always looks like the grass is greener elsewhere, but Oregon is having its own problems, and the economic pundits are saying it will get worse here before it gets better. Cali, on the other hand, has been beaten down pretty hard, and IMO is poised to recover. It always has.

Look, I'm not judging you, I just wanted to get a better picture of your situation before giving you my 2 cents. I'm just saying, think very, very carefully about this before making a decision that might put you at more risk than you are in now. Good luck.

[HMinOR]

I have rented all over Oregon, finally just settling in and buying a home in central oregon. I have never NOT had a credit check to rent, and generally when applying (even with private homeowners, not a rental company), have had to sign a statement acknowledging that if we even had a 30 day late payment they would not rent to us. It's become a very standard rental form, and as I said, even used by private homeowners. The mid valley with the colleges and other high rental demand operations can make rentals very hard to get.

Also, with your home based businesses, you might need to check into land use regulations for the town you are looking in, and be prepared to help your landlord through any necessary application processes. there are some communities that have very tight restrictions on working at home, not sure if the nature of your business is such as to draw attention or not.

[Rickers]

Walking away may not get you off the hook on your loan. With the home values lower now because of the credit crunch, the bank may auction off the house and apply the money gleaned from the auction to your loan, but they may come after you for the balance owed. You may be better off renting out the house. I may be mistaken about this but that's what they do on car loans when folks can't make the payments.

[TechmanOR]

Couldn't you rent your house in California to someone and use the income rent towards mortgage?