Wow, great tutorial on how to escape from a mortgage without going bankrupt.

Yesterday, 21:18

You didn't provide enough info for anyone here to provide you an intelligent answer. One purpose of the short sale is to avoid a deficiency, which depends on the type of loans you have.

Are they both purchase money? If yes, then foreclosure results in a credit hit, but no deficiency. If the second is purchase money and the 1st foreclosues, the cut off junior can seek a deficiency by getting a judgment in court and coming after you - wages, assets, etc, or they can sell the debt to a debt collector law firm and they can and will chase you. Only way out once that happens is to file bankruptcy.

If the 2nd is not purchase money, then in order to avoid the deficiency you need to either get the 2nd to foreclose on the first, or get the 2nd to agree to take a few bucks on a short sale and agree to not seek a deficiency.

Whatever you do, talk to an attorney who is well versed in foreclosure law first. If you are in San Diego, try John McConnin athttp:// www.upsidedownrealestate.com to get an idea of your options and their respective consequences.

Mon May 12 2008, 21:33

last posted Tue Sep 18 2007, 16:46......?

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Thu May 1 2008, 04:38

Your home is worth 425,000 TODAY. Tomorrow it may be worth 325,000, so if you hang onto, you'll be that much more in the hole.

Only two things will save you from this declining home value problem you're in. The first is that rapid inflation that drives down the value of a dollar, thereby undermining the purchasing power value of the loan. In this scenario you earn more dollars, so does everyone else, but the loan's principal is fixed so in effect it goes down. While it might appear that this is happening now, with costs going up as they have, but it isn't since by and large people aren't actually earning more money.

The second scenario is that there's some kind of comeback in the San Diego market. Ask yourself, how likely is this? San Diego doesn't have a very deep well of industry behind it, and wages there aren't much different than the rest of the country. Current real estate prices, however, are two to three times what they were five years ago. It took a historically loose credit bubble to drive the prices up to where you bought, and that bubble has now burst. It won't be back again soon.

So, having said all that, it's probably in your interest to let the property go and reduce your cost base immediately. I don't know what industry you work in, but if it's affected by the coming recession you might be looking at layoffs, and it would be better to have money in the bank for poor credit then, than to be saddled with a huge debt and no job.

Thu May 1 2008, 01:55

HooRay and Hurrrah for Nathan !! The anecdote you passed along is much more illuminating than the false hype and false hope that the media, the banks, the short sale listing agents have been promoting for months.
Statistically, fewer than one in ten short sale listings are ever approved. With a failure rate that high, I can only say that the whole short sale mania is a massive hoodwink.

Wed Apr 30 2008, 12:27

I would not put anymore money into the house. You said you have an adjustable rate mortgage, depending on your terms, it's either adjusting to the market (right now you should have a fairly low interest rate) or it's RESETING yearly. The latter is the worst. It's most likely the same type of mortgage that EVERYONE else is defaulting on. I recommend a short sale. But of course more information is necessary to be approach your situation the best way possible. I buy homes that are in these types of situations. Call me and we can discuss different options you may have.

Best Wishes,
Will Robles

888.605.9190 ext. 1
will@firstcasasolutions.com

Wed Apr 30 2008, 01:22

A friend of mine sent this to me who has sisters' working for Washington Mutual - Please be careful these companies are ruthless.........

Another anecdote for the soup:

My sisters' are service managers for WaMu's debt collections joint out in Santa Clarita and they both tell me that WaMU is still in the process of a huge ramp-up in response to the avalanche of people unable to pay their mortgages on-time.

BUT they are hiring more debt collectors in order to help facilitate the lengthening of the average foreclosure process.

When troubled borrowers are tapped out and their late mortgage payments start turning into no mortage payments, collectors hit them will all the possible options, of course, - refis, loan mods, post-dated checks - anything to get that promise to pay. But when borrowers say they STILL can't pay, agents transfer them immediately to the "loss mitigation" department that pushes them towards the short-sales option.

Nothing worng with that, per se, but it's interesting to note that once a short sale process is started, that same department, understaffed and usually unwilling to accept real losses on the property, can offer little real help to the borrower, though all together it can add months to the foreclosure process. At this point, my sisters' say, the loss mitigation department it's just another internal mechanism to forestalling and prolonging the inevitable foreclosure process as WaMu is incapable and unwilling to process large numbers of foreclosure.

And so they do what their bosses want them to do. And they stem the tide.

Thu Apr 24 2008, 19:11

I can't find the link to the forum for these guys, but I was browsing through it and seeing quite a few people succeeding in getting their loans modified. Some were just rate reductions at 30 year fixed, but some of them lowered the principal and the rate. It's a non profit no cost, so I'd suggest seeing if anyone there can help you. and no, you don't have to be behind on your payments to get a modification.
http://loanworkout.org/

Thu Apr 24 2008, 15:06

You need to get advice from a tax accountant and a lawyer to best help you with your situation.
It may not be as easy to buy another home still your wife's name.

Thu Apr 24 2008, 13:11

THis is a new one I just heard being tried with the second. Call them an offer a cash buyout of $10,000 or you are going to foreclose. Some of the seconds will take the money and wash the debt if they know you are going to stop paying. I have not heard of it until today but anything is worth at try in this market.

Good luck!

Wed Apr 23 2008, 16:32

“Lenders took back the homes of struggling San Diego County homeowners in record numbers during the first quarter. Real estate agent Linda Ring, who specializes in foreclosure sales, said she has seen many homeowners simply walk away from their properties even if they can make the payments, because they no longer want to pour money into homes now worth so much less than what they had paid.”

“In eastern Chula Vista, where foreclosures have soared, Ring estimates that 70 percent of the homes for sale are distressed properties. ‘They’re selling for practically 50 percent of what they were in 2004 and 2005,’ she said.”

“Agent Kristian Pete said he (secured) a buyer for a foreclosed home in Otay Ranch, which is in the 91913 ZIP code. It originally sold new in 2005 for $970,000 and was listed for six weeks at $589,000. Peter declined to reveal the buyer’s offering price but said buyers currently offer 5 percent to 10 percent, sometimes as much as 20 percent, below the asking figure.”

“‘It affects us all equally,’ said Peter, who also lives in the 91913 ZIP code. ‘Obviously, it’s in my best interest to try to get the situation under control and hopefully sell off the excess so the market can correct itself and go back to a stable if not appreciating market.’”

Wed Apr 23 2008, 15:55

My suggestion...start talking with your bank now. Call them get a short sale package..tell them you are looking at all of your options. Call them every week...logging who you speak to and when ...repeat the same dialogue of "we are doing the best we can." You are being recorded so remember stay calm. They may try to get you to say what your plans are...just repeat we are looking at all our options..ask them what your options are. BELIEVE ME THE BANK DOES NOT WANT YOUR HOUSE BACK. If you decide to get adversarial with the bank and don't keep lines open then they will not work it out with you.
ON A SIDE NOTE: right now in this market my biggest pet peeve is that everyone is soooo willing to just walk away and add to the problem. Many people are doling bad advice and saying...just walk away. Here is the thing....tough times are felt all around this county. If you have kids what is this teaching them? To WALK AWAY on their responsibilities!
Talk with the bank...see what your options are...call "HOPE NOW" a non profit. If in your particular situation if you have no other options..then short sale. However...on a personal note...walking away is a short term answer with long term consequences. Whether it means doing work on the side, getting a weekend job..or rent your house out ...if you show the bank that you are not someone who gives up...they will not give up on you!! Some have even begun to loosen up their grip recoiling interest rates..and yes I have ran into a friend whose bank reduced her principal!!
FYI...if I am not mistaken on a state tax level you will still be responsible for the loss as income tax once the bank sells it!
I wish you much luck and hang in there you are not alone! Get as much information on your situation and options before you make your move.

Mon Apr 7 2008, 21:44

Why don't you do a short sale and get your home sold and save it going to foreclosure and ruining your credit for up to 10 years? When you go to apply for any credit now they ask if you have EVER been foreclosed on. A short sale may work with the criteria that you gave.The agent can list the property at $375k and offer the second a thousand bucks so they will agree to it instead of ZERO when they get WIPED OUT AT THE TRUSTEE'S SALE.

Your credit will be BRUISED instead of RUINED with a short sale and you should be able to get a home A LOT quicker when the time comes VS.Foreclosure!!

Sat Mar 29 2008, 14:31

The wife name switch won't work as several have written. I would try to sell and use the $50,000 ot get out of the house. Then just rent for a year or two.

Mon Mar 17 2008, 05:07

Eddie,

I specialize in Short Refinances. Please check out our website and let me know if you are interested.

Sun Mar 16 2008, 21:35

I wish you the best of luch my friend. I deal with it everytday. If you just have to financial backing whatsoever there is a way aout. Check out this cool video.

Sat Mar 8 2008, 18:39

Simple. What's worth more to you? Tens of thousands of dollars and your peace of mind or your credit? What do you need good credit for? To buy a house, rent for a few years bank, all the money you save ad it to the 50k you will get...wow just like magic you have 20%+ down for your next house at the bottom of the cycle. It's a no brainer, plus you have the satisfaction of adding to the downturn you will eventually profit from.

Fri Sep 28 2007, 01:21

Eddie, since you are a lender yourself, how would you feel if your borrower (the family member) decided to stiff you on the debt and let you have the security they pledged to you instead of the $50,000 ? - No security? - Well how about the piece of paper they signed or the handshake.

You made 2 promises to pay the first and the second as a borrower. You should feel no guilt if it is truly impossible to pay it back. - However, if you have the choice of paying or not, you may want to ask yourself where your personal ethical code guides you, as well as considering the financial aspects.

As far as life after foreclosure... There may not be as many sub-prime lenders milling about willing to lend to people who are coming right out of foreclosure. A lot of those kind of lenders have gone or are going BK themselves. Think about the strong possibility you might be a renter for the next few years. As a renter you might miss out on real estate appreciation when the pendulum of housing prices swing back up over the next few years.

If you are able to get a post foreclosure loan, think about double digit interest rates. That is what (hard money) lenders charge for very high risk borrowers. ( Which is what you will become) 11 -12% or more.
Why do you think they call it hard money?

Tue Sep 25 2007, 22:16