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October 2012 Moms
IAM3Bs
member
WWYD? Short Sale?
IAM3Bs
member
Ladies,
This might be too personal a question, but if any of you have been through this, I'd love your input.
We purchased our home in June of 2007, right when everything was super-inflated. The value of our home has dropped dramatically, but of course, the mortgage has not. I could move into an identical house in this neighborhood for more than $100,000 less than we originally paid for this home.
DH and I really want me to be a SAHM, and our mortgage is the only thing keeping me from being able to do so. Currently, with both of us working, we are not having any difficulty paying our mortgage, but it makes both incomes absolutely 100% necessary. We are considering looking into a short-sale to get out of this money pit, and if that's not possible, just walking away. I feel pretty crappy about this, because I believe you should honor your debt obligations, but at the same time, I work at a bank, and I am sick of seeing people walk away all the time and be able to start over with seemingly no issues. It's so tempting. DH and I want to be the ones raising our child, and I am nervous about daycare.
Have any of you gone the short sale or foreclosure route? If so, what were the ramifications? I know it drops your credit score drastically, around 150 points, but to be honest, I"m not particularly concerned about that, because without this gargantuan payment, I could pay off all of my credit card debt in probably 3 months. I also know we will have to rent for a minimum of 3 years- which I am also OK with, because really, nobody is building equity in their homes right now anyway, so the benefit of homeownership really isn't there anymore. And I also know you can never get a mortgage with the same bank again- also don't care, I HATE Regions and their lack of customer service.
Did you have to pay back the difference between what the bank sold the home for and what you owed? Did you have people calling you all the time? Or was it over for good once it was settled?
If you don't want to discuss this in a public forum, but are OK giving me the information, a PM is fine also.
Any and all input would be greatly appreciated.
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Re: WWYD? Short Sale?
Do you not want to stay in your home at all?
I've never gone through a short sale, but I do know there are quite a few government backed and bank initiated programs right now helping home owners that are underwater or in other hardship situations stay in their home. They all have different qualifications so my first call would be to your bank asking for assistance possible ask for someone in Home Preservation or a similar department and find out what your options are and what programs your bank is part of. Not all of the programs require you to be in default on your mortgage, though a good portion of them require you show hardship to qualify for say a principal reduction. You'll have to work with the bank if a short sale is the route you want to go anyway.
Another option would be to refinance, rates are incredibly low right now. If you haven't refied in the past couple years, depending on your current rate, you may be able to reduce your payment enough to make your home affordable on one income.
Not a fun process, and can be very stressful. Good luck, I hope you're able to find a solution that works for your family.
Definitely this is a last resort.
We've tried to refinance, but unfortunately,since we refinanced in 2010, Regions won't refinance again (I don't know why... at the bank I work for, if you want to re-fi and will pay the closing costs, we will re-fi you all day long if you meet the DTI qualifications, which we do.) We have been on the phone with them for several months trying to work out something so we can continue to stay here and reduce the payment, but they seem to be unwilling to budge since we are not currently behind. I do not understand it at all. It's almost like they'd rather take the loss than do a simple refinance. If we refinanced currently, we'd drop a solid 3 points off of our mortgage, which would reduce the pmt. enough for us to stay and me be able to at LEAST go to part-time. It is so frustrating. I see all of these programs designed to help homeowners, but yet, we can't seem to qualify for ANY of them.
I wouldn't mind moving if I had to- ideally I'd like to stay in this home, but it isn't a life/death issue for me if we have to move.
That's crazy that they won't let you refi. Have you tried taking your business to another bank? The one I work for has products where you can roll your closing costs into the mortgage so you have no out of pocket expenses.
I totally understand the frustrations of being a struggling but good paying customer and feeling like there is no help for you. I believe home pres at my bank does only deal with customers in default, not those trying to avoid the situation. Which is crazy.
here is a link to one of the programs
https://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx