Foreclosure in East Orange>Question Details

Danielle, Home Buyer in New York, NY

How do I go about giving my home up in a foreclosure? And will it affect me from renting?

Asked by Danielle, New York, NY Wed Jul 28, 2010

We have tried to get a loan modification for over a year and have been denied. We are on one income since I lost my job a few months ago and just need a way out. We have an upside down loan and is this our only option. I know that our credit will be badly hit but will landlords hold it against us?

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12
Actually, you do have other options. You might consider selling your property with seller financing, and you'd be able to avoid the foreclosure.
0 votes Thank Flag Link Sat Jul 31, 2010
Hi Danielle,

First, I am sorry to hear about your current hardship. It just so happens that since you just recently lost your job, you might qualify for a new program (UP) that allows borrowers to defer mortgage payments due to loss of employment.
It's suppose to take effect with most lenders on August 1st. If your lender participates, you could qualify.
If you would like more details, you can e-mail me at Marshahelpinghomeowners@gmail.com.

Best of luck!

Marsha B. Washington
Realtor/Sales Associate
Coldwell Banker Residential Brokerage
973-436-5152 - office
NFMC - Foreclosure Mitigation Counselor
SFR - Short Sale/Foreclosure Resource
CDPE - Certified Distress Property Expert
0 votes Thank Flag Link Sat Jul 31, 2010
Danielle,

You've received some good answers here but I would like to add to those answers.

For starters, most landlords know that foreclosures are hitting the market everyday. Depending on the individual landlord, they may or may not accept you based on credit score, ability to pay, etc. On other hand, there are landlords who will accept you. Just because someone loses their home in foreclosure doesn't mean they can't afford to pay rent. It simply means that due to unforeseen circumstances (job loss, death, birth, sickness, etc) they couldn't afford to pay their current mortgage. Again assuming that the mortgage amount is much higher than the rental amount. For example, if someone couldn't pay a $2500 mortgage, they certainly can't afford to rent a $2400 home but they may be able to afford a $1800 rent.

Moving forward, before throwing in the towel, you may benefit from a short sale. Bottom line is if you are going to lose your home anyway, why not try to sell it short, first? Depending on several factors, the unit may sell, the bank may agree to the short sale and may sign off on the release, releasing you of any balance. There's no reason why you shouldn't try it. You have nothing to lose. If you don't get an offer, if it doesn't sell, if the bank refuses an offer, they will still foreclose. On the other hand, you may get an offer that the bank is willing to accept and upon their acceptance sign off on a full release.

I understand your need for a way out and you can still list your unit as a short sale and move out. You don't have to live there still or you can stay until hopefully it sells or worse case, the bank forecloses and you are served with a notice to vacate.

Do you only have one mortgage? Is there a second lender? Have you been served with foreclosure papers? Many times when you apply for a loan mod, you are already late with payments. Sometimes when your mortgage company calls or you speak to them, they may suggest a short sale if you are upside down. Have they suggested a short sale? The banks never reveal their cards. They very rarely tell you or an agent the magic number they will accept in a short sale. Their most common response is bring us an offer. When an offers on the table, they negotiator will talk. There's a full packet that must be submitted to the bank when listing the home as a short sale so if you are thinking of selling it short, you need an experienced short sale agent. I'm in Essex County. I've listed and sold properties in East Orange, know the town of East Orange very well and have short sales experience and Essex County Foreclosures. I'd be happy to talk with you to just go over some options. There's no obligation, just conversation.

Please feel free to contact me directly through Trulia and/or my information listed below.

Best of luck to you and please feel free to call me anytime.

Gina Chirico, Sales Associate
Lattimer Realty
973-715-1158 cell
973-575-6353 ext 17 office
Gina@GinaChiricoRealEstate.com
0 votes Thank Flag Link Wed Jul 28, 2010
If it gets to that point I can help but you still need to try and save your home it is not just your credit it will affect "you are going to be looking for a job it affects that too" trust me I learned the hard way, but learning the hard way will sometimes force a person to think out side the box and that's how I developed my program that helps victims of foreclosure giving them a solution to housing after such a terrible event.
You can get a mod keep trying the bank does not want to foreclose you just need to get to the right people. Make sure you are dealing with the investor and not the servicing agent that make a world of difference.

Ramifications of Foreclosure, Short Sale or Deed-in-lieu-of Foreclosure

Here are some of the ramifications of foreclosure, short sale or deed-in-lieu-of-foreclosure, there are many more like; insurance rates, your job (yes employers are checking credit records these days).

Your credit score will be reduced by 200-400 points, short sale and deed-in-lieu-of a little less 100-200 points.

All forms of foreclosure stay on your credit report for 10 years.

After you have gone through foreclosure, short sale or deed-in-lieu-of-foreclosure there will be what is known as the "waiting period", this period of time varies for each and can be reduced if you had some type of extenuating circumstances that caused the foreclosure:
Waiting Periods to Buy After Foreclosure – “YES” Short Sale and Deed-in-lieu-of are forms of foreclosure
• Buying after a Walk Away Foreclosure
The waiting period is 7 years
• Buying after a Foreclosure
The waiting period is 5 years with 20% deposit up to 7 years.
• Buying after a Foreclosure with Extenuating Circumstances
The waiting period is 3 years with 10% deposit up to 7 years.
• Buying after a Deed-in-Lieu-of Foreclosure
The waiting period is 2 years with 20% deposit, 4 years with 10% deposit up to 7 years.
• Buying after a Deed-in-Lieu-of Foreclosure with Extenuating Circumstances
The waiting period is 2 years with 10% deposit.
• Buying after a Short Sale
The waiting period is 2 years with 20% deposit, 4 years with 10% deposit up to 7 years.
• Buying after a Short Sale with Extenuating Circumstances
The waiting period is 2 years with 10% deposit.

In addition to the waiting period and minimum down payment, you will be required to have a minimum FICO score and the home purchase must also be the principal place of residence, not a rental nor a vacation home.

Lastly, most loan applications will ask the dreaded question "Have you ever been foreclosed on?" this stays with you for life, many think that because it will not show up on the credit report after 10 years they can answer "no", well lying on a loan application is a felony that carries a major jail term, so be aware.

Good Luck
Bob Patrick
Buy a home after foreclosure expert.
0 votes Thank Flag Link Wed Jul 28, 2010
Danielle,

it doesnt matter if any units have been selling to do a short sale the bank is gonna take a loss and they know that. I just closed four shortsales in east orange and do them all the time I have not had one bank not take a short sale and I do about 40 a year. The problem is and not insulting any other realtor but the just came back into play about 2-3 yrs ago and half of your realtors and lawyers have no...I mean no clue on how to
to them. I have about 14 myself in process right now please call me wen you get a chance and i will explain it all to you. Trust me you do not want yoir home ging into forclosure will ruin your credit and will not allow u to do anything as far as uying and most rentals do a credit check and wont take people with bad credit.Please call I can help.

Ron Simone Jr.
All Towne Realty
Realtor/Associate
732-453-2930 private
732-978-0991 cell
Ronsimonejr@gmail.com
0 votes Thank Flag Link Wed Jul 28, 2010
The other houses may not be selling because of the asking price. The advantage of doing a short sale is you sell the property for the current market value. If you have a true hardship, the bank should approve the short sale and hopefully forgive the balance. It does not hurt to try. One other option would be to turn the keys over to the bank. If it were me......I would want something in writing from them about what they will do with the balance owed. Please seek legal advice.

In our market the landlords are prefering to rent to people like you thinking they may take better care of the home. At least check with everyone you need to and find out your options.
0 votes Thank Flag Link Wed Jul 28, 2010
Hi Danielle, you may qualify for the HAFA Program
The government will now pay you $3,000 for relocation expenses to short sale your home.

visit us @
http://www.luzzogroup.com/
Web Reference: http://www.luzzogroup.com/
0 votes Thank Flag Link Wed Jul 28, 2010
Thank you all for your input. We considered short sale but home have not sold in our area. We live in a condo and none of the units are selling. The other reason we've opted not to do a short sale is that there is not guarantee the bank will forgive the loan and can come after us later for the balance.
0 votes Thank Flag Link Wed Jul 28, 2010
Danielle,

The thought of letting the property go back to the bank as a foreclosure should be done only as a last resort and after conferring with an attorney or an accountant. Talk with an attorney about the possibility of doing a short sale which will not have nearly the negative impact on your credit.

Good luck

Bill
0 votes Thank Flag Link Wed Jul 28, 2010
I would never advise you to stop paying, however a short sale is a very good option sometimes. If you email me, I will provide you with a list of options and resources we give homeowners in your situation. We have found the Landlords have been understanding of the situation you describe, and as long as your income meets the landlord's guidelines for renting you should't have too much of an issue. Hope that helps.
0 votes Thank Flag Link Wed Jul 28, 2010
Hi Danielle, Sorry to hear about your situation.Yes landlords who check your credit will hold it against you. Depending on your moral viewpoint, here are a couple of options that I see people doing...

1. Stop paying immediately, save up to move to your next place(should take about 12 months for them to kick you out of the door, sometimes takes longer I hear some people lived up to 2 years without paying.)

2. Stop paying, move out immediately and start renting while your credit is still good.

Always good to consult with a lawyer first.

good luck
0 votes Thank Flag Link Wed Jul 28, 2010
Have you considered a short sale, if not do think about it--also consider consulting with an attorney who specializes in real estate and protect yourself and any other assets you may have--most professionals do offer a free consultation. As for the landlords--much will depend on the individual(s), some may care, others may not with proper financial documentation, employment, etc.
0 votes Thank Flag Link Wed Jul 28, 2010
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