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New Member
markinflorida
Posts: 6
Registered: ‎10-13-2008
0

Foreclosure? Can anyone shed some light on this?

I need some advice. I have had my condo on the market now here in Florida for 13 months and counting, I have dropped it over $35,000 in price to where now if I sold it I would just break even with what I owe and walk away with nothing. And yet I am still not even getting any showings, never had an offer. I feel trapped in this thing and want out of it. My wife and I are planning on expanding our family and need an actual house with more room and better school district, I have been toying with the idea of foreclosure, even though making payments is not a problem but trying to sell it is.

I still need to be able to get a loan though for our new house if we did foreclose on this condo. Can this be done or should I attempt to get the loan now for the new home, close on it and let the condo go into foreclosure? I know its not ethical but we are desperate to get out of this place.

If anyone can shine some light on this I would appreciate it. Also I am self employed and have been doing nothing but NINA loans on my last few home purchases.

Valued Contributor
1111mel
Posts: 1,060
Registered: ‎02-13-2008
0

Re: Foreclosure? Can anyone shed some light on this?

[ Edited ]

If you can qualify for the house + your condo PITI, then yes you probably could get a loan.

 

...Pretending you don't have the condo and applying that way would be fraud and of course caught by the lenders in their due diligence....

 

A foreclosure would put you on a 2 year wait list to qualify for a new mortgage.

 

At this point in time bite your nails (and I absolutely understand how this feels) and continue to pay the Condo costs and wait. Time will get better.......

 

Message Edited by 1111mel on 10-13-2008 10:07 PM
Mortgage Lenders Mid-Score 778 I AM A HOMEOWNER!!!!! 30 Year 5% Fixed Rate, closed on 3/18/09
Contributor
cgmiller63
Posts: 139
Registered: ‎08-04-2007
0

Re: Foreclosure? Can anyone shed some light on this?

My sister and her husband did this back in 1999. The were upside down on their one bedroom condo and were wanting to start a family. The market was horrible and they could not sell.  They got the loan for their new house and let the condo go into forclosure.  They took a ding on their credit, but their credit recovered in a couple of years since that was the only ding on their report.  Before the bank would give them a loan on their new house, they had to have a "renter" for their condo.  I'm not sure how they pulled that one off.
New Member
markinflorida
Posts: 6
Registered: ‎10-13-2008
0

Re: Foreclosure? Can anyone shed some light on this?

I have been pre approved already for a new home loan based on the fact that I provide a lease agreement for a renter of my condo.

If I did this and lets say my renter moves out after a few months and it falls to foreclosure, the foreclosure will only affect my credit for 2 years correct? And will I be able to purchase a new vehicle with that on there before the two years is up? Any other credit problems it may give me?

 

Also the condo is in both my wife and my names but the loan itself is solely in my name, would the foreclosure affect her credit or just mine?>

 

 

Thanks

Valued Contributor
1111mel
Posts: 1,060
Registered: ‎02-13-2008
0

Re: Foreclosure? Can anyone shed some light on this?

I have been pre approved already for a new home loan based on the fact that I provide a lease agreement for a renter of my condo.

If I did this and lets say my renter moves out after a few months and it falls to foreclosure, the foreclosure will only affect my credit for 2 years correct? And will I be able to purchase a new vehicle with that on there before the two years is up? Any other credit problems it may give me?

 

Also the condo is in both my wife and my names but the loan itself is solely in my name, would the foreclosure affect her credit or just mine?>

 

_________________________

Foreclosure is bad debt & reports for 7 to 7.5 years. (to qualify for FHA is a min of 2 years for a new mortgage).

 

Auto loans will always be available with a decent down payment and probably the not so perfect interest rate.

 

If you tell the lender everything for truth "to date" then it is what it is.

Mortgage Lenders Mid-Score 778 I AM A HOMEOWNER!!!!! 30 Year 5% Fixed Rate, closed on 3/18/09
Moderator Emeritus
ByrdMan
Posts: 7,975
Registered: ‎12-19-2007
0

Re: Foreclosure? Can anyone shed some light on this?

Mark, the foreclosure will affect both of your credit files.
___________________________________________________________________
Do what is true in spite of the consequences--your future is only as true as you are.
Senior Contributor
MattH
Posts: 3,245
Registered: ‎04-03-2008

Re: Foreclosure? Can anyone shed some light on this?


markinflorida wrote:

I need some advice. I have had my condo on the market now here in Florida for 13 months and counting, I have dropped it over $35,000 in price to where now if I sold it I would just break even with what I owe and walk away with nothing. And yet I am still not even getting any showings, never had an offer. I feel trapped in this thing and want out of it. My wife and I are planning on expanding our family and need an actual house with more room and better school district, I have been toying with the idea of foreclosure, even though making payments is not a problem but trying to sell it is.

I still need to be able to get a loan though for our new house if we did foreclose on this condo. Can this be done or should I attempt to get the loan now for the new home, close on it and let the condo go into foreclosure? I know its not ethical but we are desperate to get out of this place.

If anyone can shine some light on this I would appreciate it. Also I am self employed and have been doing nothing but NINA loans on my last few home purchases.


Don't even think about defaulting, especially now.  Credit ratings are gonna matter more than ever in the next few years in all sorts of ways.  Can you afford to make extra principal payments for a year or two?  If so, that might be the fastest way you can get your loan balance down to where you can afford to sell.  And absolutely do not try to play any games with lenders, everybody is checking details much more than they did in boom when they mostly required proof of breathing.

 

 

TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
Senior Contributor
mickie08
Posts: 3,299
Registered: ‎04-22-2008

Re: Foreclosure? Can anyone shed some light on this?

I agree with MATTH.  Are you pre-approved, or just pre-quailified.  Alot of LO's call a pre-qual a pre-approval and their is a huge difference, especially in this market.  The LO's are desparate for business and will push to get any loan into the process that they can hoping that they can convince the UW to look the other way.  From what I have heard, to be able to do an investment property loan you will need 20%+ down, high fico (probably 680 or so minimum), and at least 12 months rental history with rental agreement and tax forms (claimed income) to prove it.  They do not accept just a rental agreement anymore.  Otherwise you will need to be approved on just your regular income.

 

Also, due to this type of mortgage fraud (and make no mistake, this is mortgage fraud) there is alot of talk of banks being able to go after people who have the means to stay in their homes and try to play the system to buy a new house while the market is down and then walk away from the house that is underwater.

 

What I don't understand is I know there is no second home financing right now that is zero down payment and since PMI is very hard to get right now for investment homes (unless FHA does these loan which I am not sure), you are going to need 20% down.  If you have the 20% down on the new purchase, why would you not just use it to get the home sold and the debt paid off, and then do a FHA loan with minimum down (3.5%).   Then you get out of the old home, into the one you are buying, and do not take a credit hit.

 

Also, why not  Actually rent it out for the time being.  You may loose a little money month to month but you would be paying off the equity.  In the end, when the market settles down you can then sell it maybe even for enough to make back the money in it.

 

 

Senior Contributor
MattH
Posts: 3,245
Registered: ‎04-03-2008
0

Re: Foreclosure? Can anyone shed some light on this?

[ Edited ]

In the meantime, while waiting for some combination of scheduled amortization, extra principal payments, and at SOME point the market turning around, perhaps the original poster can find imaginative ways to maximize the space s/he already has. Think outside the box. For instance, buy some lumber and build a loft like I had in my college dorm room. Get a restaurant-style dining booth (which seats four people in much less space than a standard table). Read design publications for tips to maximize space. I realize these sorts of tricks won't be the same as a bigger place, but they can be done now.

 

Also, I have a problem with the sentence "...need an actual house with more room..." as it betrays an all-too-common problem that's part of the reason our country is in trouble: confusing WANTS with NEEDS.  Most of humanity manages to raise families in far less space than we in the USA think we need, even most of the developed world does.

 

Message Edited by MattH on 10-14-2008 09:12 PM
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
Moderator Emeritus
ByrdMan
Posts: 7,975
Registered: ‎12-19-2007

Re: Foreclosure? Can anyone shed some light on this?


MattH wrote:

In the meantime, while waiting for some combination of scheduled amortization, extra principal payments, and at SOME point the market turning around, perhaps the original poster can find imaginative ways to maximize the space s/he already has. Think outside the box. For instance, buy some lumber and build a loft like I had in my college dorm room. Get a restaurant-style dining booth (which seats four people in much less space than a standard table). Read design publications for tips to maximize space. I realize these sorts of tricks won't be the same as a bigger place, but they can be done now.

 

Also, I have a problem with the sentence "...need an actual house with more room..." as it betrays an all-too-common problem that's part of the reason our country is in trouble: confusing WANTS with NEEDS.  Most of humanity manages to raise families in far less space than we in the USA think we need, even most of the developed world does.

 

Message Edited by MattH on 10-14-2008 09:12 PM

I would agree with you, Matt, if it were your money and your life.  If it were YOUR situation we are discussing, it would be cool.  But, the poster needs/wants whatever, more space.  It's up to him to decide that, not the myFico mortgage board members.  Now, he shouldn't default, as it will cause all kinds of problems that he is not bargaining for.
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