To do a bridge/blanket loan you need AT LEAST 80% equity in both properties. So if you dont put down 40% on a bigger property you cant put two loans together. Plain and simple. It not a good situation to be overmortgaged and I come across it every day. Good Luck!!!

Wed May 7 2008, 18:11

Thanks for your question which is very important and difficult in the current market. Indeed, if you sell first, it will be what we call a short pay or short sale: a long process implying the agreement of the bank to abandon debt. It takes time especially if you have two different lenders. If you have not late payments, it will probably not impact your FICO and you will be then able to buy bigger. You could also start by looking to buy bigger. But you would have to justify high revenues so that you could cover payment of two houses at the same time, minus potential rent if any. An alternative solution, I have to check, is the ability to transfer your loan on the new house. I will let you know for more sophisticated solution as soon...I would have spoken with a loan officer. Anyway, thanks so much for your question. alain (562)331-4063

Wed May 7 2008, 17:59

Sandra,

Joan pretty much sumed up what your options are. Waiting would probably be in your best interest, it dosen't sound like you have to sell. I live in Lakewood and yes, unfortunately values have come down. If you would like to keep an eye on the market and see how the prices play out, just go to my website and you can search out the areas of Lakewood that you are interested in. This way you will know if prices keep coming down or start to level out. Please feel free to contact me should you have any questions or concerns.

Lou McNamee
Coldwell Banker
562-879-9677

Wed May 7 2008, 17:54

Hello Sandra. It's difficult to advise you as we don't know how much you are upside down. If it's not too much, you could do a short sale and sign a promissory note for the difference. Many banks will agree to take less at the close of escrow if you are willing to sign a promissory note. The banks often offer a 0% loan for 20 years. The benefit of signing the note is that it will not affect your credit and the bank will not issue a 1099 because there's no loan forgiveness. Obviously, the new note will affect your debt to income ratio, but as long as you stay current with your payments, it will not affect your credit score. The downside of doing a short sale is that many banks will not consider a short sale unless you have missed a payment and you can demonstrate a hardship. The value of your home being less than the loan is not considered a qualifying hardship. I would highly recommend that you consult with a CPA, real estate agent and mortgage broker about your options and then you can make an informed decision. In the end, you may very well decide that staying put for now and waiting for the values to go back up is your best option. Good luck to you.

Wed May 7 2008, 17:50

If you can possibly wait for prices to come back up, that would be the best time to sell. If you do it now, you would have to make up the difference in the amount that it sold for and to pay it off. You could do a short sale (but it will affect your credit) which means selling it for less than what is owed on the mortgage. However, in order to do this, you must prove a hardship somehow.
If you can wait for values to come back up and you don't have to sell, that would be the best option for you unfortunately.
Good luck!
Joan Patterson, B.A., A.S.P. G.R.I, Realtor
Keller Williams Realty
8250 White Oak Avenue, Ste 102
Rancho Cucamonga, CA 91730
951-204-1864

Wed May 7 2008, 17:36