Home Buying in 33990>Question Details

Gatorrn, Home Buyer in 33990

What do you do if your house is 70k upside down and you would like to get married and move into another home BUT you can't afford both?

Asked by Gatorrn, 33990 Mon Sep 12, 2011

I was married to my ex and after the divorce, I got the house which is 70k upside down. My house is not large enough to accomodate me and my new fiance's kids so what am I supposed to do? Is short sale an option?

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Answers

21
Depending on your income short sale is probably an option. Find a local Realtor who has closed short sales with YOUR BANK. Complete the "hardship package" (its quite a lot of work) and then see what the bank says. Good luck!
0 votes Thank Flag Link Sun Jan 15, 2012
Lenders are going to view a short sale as a foreclosure on your credit, someone else mentioned renting, if you don't want the credit hit, that advice is probably the best if its feasible. Refinance maybe an option Chase's HARP program will go to 125% LTV and unlimited CLTV as long as the 1st is at 125% and that's only if the Chase is the lien holder. Hope this helps and always contact the bank that is servicing the loan and see what options they have to help avoid foreclosure.
Paul
0 votes Thank Flag Link Fri Jan 13, 2012
Have you considered renting it out?
0 votes Thank Flag Link Fri Jan 13, 2012
I can’t make my mortgage payments. Which is a better option? A short sale or foreclosure?

Life’s most unfortunate circumstances are unforeseeable, like unemployment and serious illnesses. When you find yourself in this predicament and you’re considering giving up your home, it is important that you understand the significant difference between a short sale versus a foreclosure.

One of the most damaging things to you credit score, reputation, and personal dignity is the foreclosure process. Foreclosures remain on your credit as a public record for up to 7 years.

An alternative to foreclosure is a short sale. A short sale means selling your home for less than your mortgage balance. You will still owe the balance of your mortgage in many cases. Your real estate agent or attorney can negotiate the remaining balance. It is important that you allow an attorney to review your contract, as they are usually negotiated by banks and in the favor of the bank.

It’s unfortunate that you’re going through this troubling time. If you’d like to know more about a short sale or a foreclosure and the effect that they can have on your credit, download my free eBook 12 Tips to Buying Real Estate in Southwest Florida.

Contact A.J., The Real Estate Professional, today! Or call 239-565-7867.
Web Reference: http://www.ackermanswfl.com
0 votes Thank Flag Link Mon Jan 9, 2012
Gator RN-
I answered this question earlier, before you elaborated and also added some info below. The bank will ask for bank statements when deciding on the short sale, so if you have 70k in cash between savings and checking, they will most likely want some of it in order to approve the sale. You REALLY need to talk to an attorney.
But what I really wanted to comment on was the amount of rent you can get for your home if you rent it out. This must be a really nice home with pool, maybe waterfront, to garner that much rent. How about trying to get a loan modification, then rent it out and wait on the market to recover somewhat. Upside down by 70k is not all that much when I think about all the short sales I have done where some are 100's of thousands of $$ upside down -- one was $450k down.
Carolyn
0 votes Thank Flag Link Tue Sep 13, 2011
Wow, your question certainly has warranted a lot of attention, and rightfully so. This is the million dollar question: What do I do with my upside-down home?

Here's is an answer you just may like, and is based on my 10+ years in mortgage banking. Depending on your current debt-to-income ratio (how much you pay in bills compared to how much money you make per month), you may be able to do the following:

Apply for a mortgage for the new home, with myself or any reputable Florida lender.

Using both your own and your fiance's income, we may be able to qualify you for the mortgage on the new home. Even if you had a family member that was willing to "co-sign" we could utilize their income even if they wont be living there. This is referred to as a non-occupant co-borrower and is allowable on certain loan programs.

Worst case scenario, you could find a lease to own home that would allow you to move in immediately and purchase the home several months down the road. Once you have filed your 2011 taxes in Jan/Feb showing the rental income and proof of your new rented residency, you will be able to utilize the rental income to offset the mortgage payment on the old home, even if you still take a few hundred dollar loss per month. With the drop in home prices, it is VERY possible to find a newer, larger home for much less money, helping to mitigate the small cash flow loss on the rental property.

By shopping intelligently for your new home, you could arrange it so your total monthly expenditure doesn't exceed what it currently is. The bottom line is that there are many more solutions than have been presented here utilizing careful financial planning and creative financing. A good mortgage banker is the next person you should speak to. They will be able to present your options, allowing you to make an informed decision.

I wish you the best of luck and of course, don't hesitate to call :-)
Web Reference: http://LendingFL.com
0 votes Thank Flag Link Tue Sep 13, 2011
Your question involves many facets. Regardless, you will have to sell the house and if it is upside down it will be a short sale. You did not mention if you are current on the mortgage payments or clearly define "I got the house". Normally, I would expect you got the house through a quit claim deed in the divorce settlement and I suspect the ex, although no longer on title is still on the mortgage and note...which means she is still liable. No matter what the divorce decree says, it does not change your / her earlier contract with the lender. Discuss with your ex what she might be willing to do. Talk to a realtor and find out what the house will sell for. Call your lender and explain your situation. Depending on your credit and income, you may be able to buy another house and short sale the current one. You need to provide a lot more information to whomever you decide to work with.
Eric Hess
Broker
239 989 2950
0 votes Thank Flag Link Mon Sep 12, 2011
Gatorm,

I think everyone has a point...I agree with getting legal advise and contacting a real estate pro. I was unclear, however, what you meant by "MOVE" into another home. Does your fiance have a home you are considering moving into? Are you considering renting or buying? Best of luck to you. If you need a realtor, please don't hesitate to contact me. I can help you with both renting or buying your future home.

Susan Pinto
Maxim Realtors LLC
239-822-7623
http://www.maximrealtors.com/spinto
0 votes Thank Flag Link Mon Sep 12, 2011
Thank you for all of the advice! Not to get personal but I have endured 3 tragedies in less than 3 yrs with the last one being the tragic death of my mother. Emotionally, I am overwhelmed. If I am 70 k upside down and I have exactly that much between my savings account and my checking account, will the bank require I use all of it to pay back my mortgage? My credit score is 801 and the only debt I have is a car payment and my mortgage. My boyfriend currently lives in the home I would be moving in to. My mortgage is $2200 and I would be lucky to get $1800 in rent....
0 votes Thank Flag Link Mon Sep 12, 2011
Hello Gatorrn,

I would recommend that you talk to your bank and you talk to your attorney--they would be the best ones to give you the advice that you need.

Myke Triebold, GRI, LMC
MykeSaysSold@aol.com
850-305-6256
http://www.DestinHomeRealtor.com
Web Reference: http://www.MykeTriebold.com
0 votes Thank Flag Link Mon Sep 12, 2011
I'm guessing that you have a mortgage, and to buy another home, you would need a mortgage for that. Your options are few and not very desirable. You could sell your home and bring money to closing to cover the shortage. Assuming that is not an option, you could consider renting your home. However, if you are 70k upside down and have a mortgage, I'm guessing you would be in a negative cash flow situation. None-the-less, if you could afford to make up the difference between the mortgage payment and the rent you collect, this still could be an option. Be careful though. If you get a renter that doesn't pay regularly, you could find yourself defaulting. Another option is short sale, but you have to have a hardship. I would be pleased to discuss your situation with you, but it may be wise for you to consult a real estate attorney as well.

Reggie Blough
Re/Max Island Harbor
239-214-5984
regblough@embarqmail.com
0 votes Thank Flag Link Mon Sep 12, 2011
You've been given great advice thus far Gatorrn. You definitely have or should consult a tax accountant, seek legal advice as to the pros and cons' of short selling the home vs keeping it, possibly renting it out to cover the existing mortgage payments until the market comes up again, all these things. Is the mortgage payment current? .Some banks/lenders will allow you to sell it short even if you are current on the mortgage.
I too, of course would be happy to ask for your business.
Don't hesitate to call if you have further questions and Good Luck!
Karen
0 votes Thank Flag Link Mon Sep 12, 2011
Gatorrn,

Short sale it for sure. Call me if you need help selling your existing home or finding the new one.
Make sure the new home is in your wife's name only. Chat with an accountant or lawyer to cover any legal bases.

kevin@kevincloutier.com
239.246.6639

Cheers

Kevin

Kevin Cloutier REALTOR
Southern Premier Realty
Cape Coral, FL 33914
0 votes Thank Flag Link Mon Sep 12, 2011
Each situation requires careful individual attention and discussion to discover your best optionS, based on your personal goals, and financial situation.

I would suggest sitting with a trust worthy experienced professional to review you present and future goals.

I would suggest beginning witha tax professional and Realtor to help gather the necessary information so that you can make good decisions. You and your future husband don't need financial issues to get in the way of your new life together!

If you need a Realtor, please feel free to give me a call.

Good Luck to you!

Susan Burhoe
Broker/ Gulf Access Realty
239-424-0133
susan@gulfaccessrealty.com
0 votes Thank Flag Link Mon Sep 12, 2011
You could A:) find out what the house would RENT for. If it covers your expenses then that could be an option.
or B.) Contact an agent to determine if you are a candidate for a short sale. I have completed multiple short sales succesfully. If you need more information on how a short sale works give me a call.
0 votes Thank Flag Link Mon Sep 12, 2011
A big part of getting a Short Sale approved, is to write a HARDSHIP letter to your Bank asking them to cooperate:

Getting a Short Sale through is tough enough in real Hardship situations, but you will be fighting an up-hill battle.

Another option would be to do a DEED IN LIEU, where by you give the Deed to the Bank in exchange for the Note and a letter stating that the Loan is Paid in Full.
This is quick, only semi-painfull, and your chances are so-so.

Talk to a local Realtor and see what you come up with.

Good luck and may God bless
0 votes Thank Flag Link Mon Sep 12, 2011
Short sale is an option. I would highly recommend contacting a few agents, an attorney and your tax professional to discuss any possible ramifications (legal and tax). If you need some direction with an attorney or tax pro let me know. And of course I would love the opportunity to interview for the job should you decide to short sale.
Web Reference: http://www.mysharphomes.com
0 votes Thank Flag Link Mon Sep 12, 2011
Try renting it out...til the market comes back.
0 votes Thank Flag Link Mon Sep 12, 2011
You would be surprised at the deals banks are making with people who are upside down on their mortgage. Call your bank --- if you would like an experienced short sale specialist like myself to call on your behalf, let me know. It doesn't cost anything!
Carolyn 239-243-4082
0 votes Thank Flag Link Mon Sep 12, 2011
A short sale is an option...but you have to prove financial hardship. Sounds like you just want a bigger house to accomodate new family situation, which isn't really a hardship. I would suggest start saving for a downpayment for a 2nd house. Rent out the first house until the market gets better. Good luck!
0 votes Thank Flag Link Mon Sep 12, 2011
Short Selling your home may be an option. It depends on your personal situation and what kind of terms your bank is willing to offer you. I would be willing to meet with you to review and discuss your options. Please don't hesitate to let me know if you have any additional questions.
Web Reference: http://www.resuperstars.com
0 votes Thank Flag Link Mon Sep 12, 2011
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