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Rental property going into foreclosure, will I be able to get an auto loan later this year?

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mx6bfast
Valued Member

Rental property going into foreclosure, will I be able to get an auto loan later this year?

We moved from TN to FL over 3 years ago and after the house being empty for nearly a year found a renter. That contract is up in a few months and we have told the person living there we will not make any other payments on the house. We currently pay $450 of our own money each month to cover the rest of the mortgage. We are letting it go to foreclosure because we recently purchased in FL. In addition my car will be paid off in exactly 2 days. We got our current auto loan through a credit union. Combined we will be saving roughly $900/month between the 2. My question is my wife will need a car later this year, should we have any problems getting a new loan? We are looking at anywhere from a $32 - $40k car, will trade in hers, and put a thousand or 2 down. Our current FICO score is 713. We have not had a missed payment in that past 6 or so years. The only ding we have is high credit utilization.
Message 1 of 16
15 REPLIES 15
Creditaddict
Legendary Contributor

Re: Rental property going into foreclosure, will I be able to get an auto loan later this year?


@mx6bfast wrote:
We moved from TN to FL over 3 years ago and after the house being empty for nearly a year found a renter. That contract is up in a few months and we have told the person living there we will not make any other payments on the house. We currently pay $450 of our own money each month to cover the rest of the mortgage. We are letting it go to foreclosure because we recently purchased in FL. In addition my car will be paid off in exactly 2 days. We got our current auto loan through a credit union. Combined we will be saving roughly $900/month between the 2. My question is my wife will need a car later this year, should we have any problems getting a new loan? We are looking at anywhere from a $32 - $40k car, will trade in hers, and put a thousand or 2 down. Our current FICO score is 713. We have not had a missed payment in that past 6 or so years. The only ding we have is high credit utilization.

yeah you likely will have a problem since later this year you will be in the middle of the house being reported over 120 days late multiple times most likely.

if you MUST buy a new car and that high price of a car I would do it NOW while you have a 713 credit score.

Message 2 of 16
coterotie
Established Contributor

Re: Rental property going into foreclosure, will I be able to get an auto loan later this year?

Hopefully you have talked with someone about the foreclosure.  TN is a recourse state, meaning they can sue you for the deficiency on the TN home and obtain a judgment and attach it to the FL home.  In addition to the usual bank levy and wage garnishment.  Have you tried the short sale route?  That would at least protect you from a deficiency and since the house is rented, you might find an investor to take it off your hands.

 


@mx6bfast wrote:
We moved from TN to FL over 3 years ago and after the house being empty for nearly a year found a renter. That contract is up in a few months and we have told the person living there we will not make any other payments on the house. We currently pay $450 of our own money each month to cover the rest of the mortgage. We are letting it go to foreclosure because we recently purchased in FL. In addition my car will be paid off in exactly 2 days. We got our current auto loan through a credit union. Combined we will be saving roughly $900/month between the 2. My question is my wife will need a car later this year, should we have any problems getting a new loan? We are looking at anywhere from a $32 - $40k car, will trade in hers, and put a thousand or 2 down. Our current FICO score is 713. We have not had a missed payment in that past 6 or so years. The only ding we have is high credit utilization.



Message 3 of 16
mx6bfast
Valued Member

Re: Rental property going into foreclosure, will I be able to get an auto loan later this year?


@coterotie wrote:

Hopefully you have talked with someone about the foreclosure.  TN is a recourse state, meaning they can sue you for the deficiency on the TN home and obtain a judgment and attach it to the FL home.  In addition to the usual bank levy and wage garnishment.  Have you tried the short sale route?  That would at least protect you from a deficiency and since the house is rented, you might find an investor to take it off your hands.

 


Yes, we already have an attorney lined up and they have been made aware of the situation. I have spoken with our realtor and we are going to list the house the same month when the payment is late. Nationstar states the house has to be 60 days late to start the short sale process so we are hoping to get a jump on that. We are hoping to short sale, but we were told the short sale and foreclosure process occurs at the same time. I was just posting as a worse case scenario.

Message 4 of 16
coterotie
Established Contributor

Re: Rental property going into foreclosure, will I be able to get an auto loan later this year?

Good luck hope everything works out.   Glad to see you're going into it prepared.

Seems counterintuitive to have to wait 60 days to start the short sale process, since if you started it earlier the lender would likely get more money, particularly if it was priced right.  Around here, which is still very much a buyer's market, houses priced correctly sell relatively quickly.  But if the owner's are hopped up on Hopium, they sit for years.

 


@mx6bfast wrote:

@coterotie wrote:

Hopefully you have talked with someone about the foreclosure.  TN is a recourse state, meaning they can sue you for the deficiency on the TN home and obtain a judgment and attach it to the FL home.  In addition to the usual bank levy and wage garnishment.  Have you tried the short sale route?  That would at least protect you from a deficiency and since the house is rented, you might find an investor to take it off your hands.

 


Yes, we already have an attorney lined up and they have been made aware of the situation. I have spoken with our realtor and we are going to list the house the same month when the payment is late. Nationstar states the house has to be 60 days late to start the short sale process so we are hoping to get a jump on that. We are hoping to short sale, but we were told the short sale and foreclosure process occurs at the same time. I was just posting as a worse case scenario.




Message 5 of 16
StartingOver10
Moderator Emerita

Re: Rental property going into foreclosure, will I be able to get an auto loan later this year?

I don't think the info you received from Nationstar is correct. Remember, the lender's employees aren't all the same and you will get different info from different departments. I wouldn't hesitate to start your sale now. The new buyer wouldn't be able to occupy until the lease is completed unless they agreed to vacate before the lease end date as the lease 'rides with the property'.

 

I have done short sales specifically with Nationstar that were not 60 days in arrears. Best to get started now on the short sale. Hopefully you can then mitigate the number of months of default.

 

Glad to see you have an agent and attorney to guide you through the short sale process.

Message 6 of 16
mx6bfast
Valued Member

Re: Rental property going into foreclosure, will I be able to get an auto loan later this year?

Thanks for the info. I will look into that.

 

I have seen an Auto FICO score, is that still being used? We are concerned that since our score will probably dip below 600 with the short sale we may not be able to get an approval. Our last 2 cars were both paid off in time with no late payments.

Message 7 of 16
enharu
Super Contributor

Re: Rental property going into foreclosure, will I be able to get an auto loan later this year?


@mx6bfast wrote:

Thanks for the info. I will look into that.

 

I have seen an Auto FICO score, is that still being used? We are concerned that since our score will probably dip below 600 with the short sale we may not be able to get an approval. Our last 2 cars were both paid off in time with no late payments.


yes most dealerships use the auto enhanced version for FICO scores.

I'm not too sure on what the exact differences are compared to the normal FICO formula, but I am guessing it places more weight on previous auto and installment loan histories.

 

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Message 8 of 16
mx6bfast
Valued Member

Re: Rental property going into foreclosure, will I be able to get an auto loan later this year?

Update: We decided to go ahead with the purchase now instead of waiting based on the unknown factor, and speaking with a couple of friends that we know who do financing. We got a 2014 Mustang convertible, which she liked the muscular look of compared to the new 2015's coming out later this year. We were able to get a loan through BOA for 4.19% for 6 years but ended up going with my employers credit union for 3.99%. My wife previously used BOA for her Mustang that we traded in and my credit union for my car I just paid off. The list price on the car with added features was $37205, but with my employers discount, and available incentives, were able to get $6230 off MSRP, $4k were incentives. So much off that the sales person we were dealing with at Ford was amazed, it was a better deal than he said he could get. After all taxes, and then $1500 for the trade, out the door price was $32140.

 

So, no need for us to worry about that anymore. Now we just need to concentrate on working our credit scores back up.

Message 9 of 16
Creditaddict
Legendary Contributor

Re: Rental property going into foreclosure, will I be able to get an auto loan later this year?


@mx6bfast wrote:

Update: We decided to go ahead with the purchase now instead of waiting based on the unknown factor, and speaking with a couple of friends that we know who do financing. We got a 2014 Mustang convertible, which she liked the muscular look of compared to the new 2015's coming out later this year. We were able to get a loan through BOA for 4.19% for 6 years but ended up going with my employers credit union for 3.99%. My wife previously used BOA for her Mustang that we traded in and my credit union for my car I just paid off. The list price on the car with added features was $37205, but with my employers discount, and available incentives, were able to get $6230 off MSRP, $4k were incentives. So much off that the sales person we were dealing with at Ford was amazed, it was a better deal than he said he could get. After all taxes, and then $1500 for the trade, out the door price was $32140.

 

So, no need for us to worry about that anymore. Now we just need to concentrate on working our credit scores back up.


WOW, Congrats, that is great!

Message 10 of 16
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