Foreclosure in Reston>Question Details

Nancy, Other/Just Looking in Reston, VA

Do banks consider going back to school a reason for short sale or forclosure since I chose to quit my job?

Asked by Nancy, Reston, VA Tue Oct 28, 2008

When we bought our townhouse both me and my husband were working and we could afford paying our mortgage, one year after that I went back to school for my master's degree and we ended up with one income which wasn't enough to pay the mortgage. Now we're thinking about short sale or maybe even forclosure because the house's price has gone down so much. Any idea what our bank would most likely do? shortsale or foreclosure? and in case of foreclosure what are the bad consequences other than a bad credit history??

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9
Nancy
This answer may not make you happy, and I do not mean to offend you.

There are people who NEED help. Death of a spouse, cancer, medical issues, divorce, etc. These people are dealing with forces beyond their control,, and they need help with loan modifications, short sales, etc.

I see many posts like yours 'Our home's value has declined, we have a zero down loan, i want out". I do not know more than your post, so just based on that here is my two cents:

First, you made a promise to the people that loaned you the money to pay them back. Are you a person of your word? Are you a couple of integrity>? What would happen if you were the investor that bought the loan? What if your asset manager called you and and explained your story to them? How would you feel taking a 30% - 50% hit on the investment you made? What would you think of the people that signed loan docs. promising to pay you back?

Second, what options do you have?
Get a side job, earn enough income to meet your obligation.
Rent it out, then you go find a place to rent...yes, you'll be negative but that's the way it goes.
Get a room mate to help make up the difference.

You could try for a short sale, although I would not help you nor refer you to anyone.
That will ding your credit score 80 - 120 points.
Let it go into foreclosure - 150-200+ points
While you are at it, just declare bankruptcy, that's 7 years before you can get a loan on anything.

Nancy, I am sorry to so direct. There are people that are really in trouble. I encourage you to do the right thing. We need people to value honor, integrity, and their word.

I am a Rotarian. We have the Four Way Test that we apply to questions like yours:
Of the things we think, say, or do:
First - Is it the truth?
Second - is it fair to call concerned?
Three - Will it build goodwill and better friendships?
Fourth - Will it be beneficial to all concerned?

Good luck. One more question - what would you say if you kids asked you what you posted?
4 votes Thank Flag Link Tue Oct 28, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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Seems to me that nothing good will come from a short sale or foreclosure. You will get stuck with bad credit for a long time (which can impact renting in future, not just buying) plus all the money you've spent is just gone and you will have to leave a house you seem to like. Wouldn't it be better to put off the rest of grad school for a while, go back to work full time and pay the mortgage? The market in NoVa should recover. Why not postpone grad school for a year or two?
1 vote Thank Flag Link Tue Oct 28, 2008
You should have kept your job. Good Luck
1 vote Thank Flag Link Tue Oct 28, 2008
Nancy FHA has a program called "Hope for Homeowners"It Is set up to help home owners Save their House.It also gives you the right to call your lender. Be Pro Active ! Being in a tight fix doesn't make you a bad person,Like being a Realtor doesn't make you a crook. Oh, Don't let anybody 'HELP YOU' and get you in a worst situation.
0 votes Thank Flag Link Sat Nov 1, 2008
Nancy there are no easy answers but with the info provided you should probably contact a local real estate professional who is knowledgable in short sales.Foreclosure should always be your last option as it has the longest ,most lasting effect.Several conditions such as how many ,if any payments are behind can factor in to the negotiations with the bank.( http://www.trydunlo.com) my web site has info the REO process. 757-409-0664 call for additonal info on qualified short sale representives in your area.FREE!
0 votes Thank Flag Link Thu Oct 30, 2008
Nancy - perhaps you've never had poor credit before. It's terrible. They will, eventually, collect the money from you. And, you'll regret the decision many times over. Figure out how to pay your mortgage. If you have to, go to school part time, or stop for awhile. What good is a masters degree if your credit history is such that you can not get a job (yes, this is considered for many jobs now, especially the ones that pay well), own a house, get a car loan, etc. etc. You are making a mistake.
0 votes Thank Flag Link Wed Oct 29, 2008
less information is probabily best in this case, you can just state you lost your job or even better are currently unemployeed. make ssure you have someone who is qualified with short sales to assist you. depending on how far behind you are, that is how long you have to do a short sale. if you are running out of time you can try a deed in lieu of foreclosure as we.. what i recomend is calling your mortgage company, asking for the home retention department and see if they will modify your loan so you can stay there if not then ask about the short sale. good luck
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Oct 28, 2008
A reply to Mr. Sorem. Thank you for answering my question. I do recpect your openion. Although we knew it would be a little tight after I would go to school but we were fine using our savings until I graduate and find a job, but unfortunately we lost our savings which were stocks in the market. I did try getting a part time job but it didn't work because I have to be working on my research all day at school and I have classes all evenings, plus I'm a mother of two kids. and renting the house wouldn't cover its mortgage even if we would go and rent with a cheaper price. its not that we want to go for a foreclosure and are happy with it, and when we signed the contract we thaught that at any point if we can't afford the house anymore we would sell it even if we made no equity out of it, and we would've paid the difference in price out of our pocket if we could...we would love to keep our house but the bank wants its payments and we cant afford it. Anyhow, we tried talking to our bank but they give us no options...we are still trying to find a solution with them. Once again, thanks for the answer.
0 votes Thank Flag Link Tue Oct 28, 2008
Contact the bank submit a hardship packet of info. Banks truly DONT want your property might be able to work with you.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Oct 28, 2008
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