topic Re: Help with a Fannie Mae question, house value plumeted. in Mortgage Loans

Help with a Fannie Mae question, house value plumeted.

Anonymous — Wed, 16 Sep 2009 23:30:18 GMT

I will try to be short and to the point any help or suggestion greatly appreciated. K- bought our house in 03 for 147000. seller didn't disclose material defects, inspector didn't find them, will cost over 70k to fix. After problems found house is worth only 92k! Took sellers and inspectors to crt and lost because of bad lawyer, and bad IL laws. So in the mean time hubby goes to war, gets injured, now 100% disabled, I lost one of my jobs, (had 2 full time for 9 years) so income greatly reduced, we arent behind in mort, just can't do any repairs, and house is almost condemable. Don't want to bail, bk, or live like a pauper.

I called lender about Pres, Obamas new programs, Don't q for anything because I haven't stopped paying and not in the red, so only option is to hope the mort. co can come up with something, said reduced int. rate. also could possibly Loan modify what should I know that they won't tell me. ?

We need to be able to build a new house in the near future, then fix this one (we have to gut it) and sell, or rent it out. OR build new foundation move the house and rehab it. (big mess)

Anyone know if options warnings caveats?

Thanks so much oh hhi is 54k dti is less than 31%

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Thu, 17 Sep 2009 01:50:35 GMT

when did the defects come to be known, you are talking 6 years ago and I would assume that defects taht "appear" 6 years later (or even 4-5) would not be previous owners fault unless you can prove they had advanced knowledge of them.

What is the balance on your mortgage?

What is total gross monthly income?

FICO scores?

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Thu, 17 Sep 2009 02:14:50 GMT

No, some ugly issues showed up in less than a year, we promptly sought legal advice, but in illinois, the laws are very lax for things like this, a seller can get away with just about anything, and an inspector doesn't really need to leave his car to inspect your house, they can put down anything they want, and if your green like we were and believe them you get to eat the defects. Absolutely no presidence has been made in illinois accept, alot of low lifes make money hanging out a shingle for home inspection, so those real estate agents and mortgage lenders can make that comish. Lawyers are a huge waste of money, we live in a county were the lawyers will eat their young for money. The Baptist minister and his wife that sold us the house made out like theives we got screwed. We finished the court case about 2 years ago minus 10,000.00 poorer than when we started (lawyer made out too)

Anyway the M/I is 4700 ish

Loan is now at 133000 ish

Thank you thank you thank you

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Thu, 17 Sep 2009 02:17:33 GMT

Last I checked his is 620 but I cleaned up since then have a few minor issues to clear up (medical for his line of duty injury) yes they charged us. fixing that.

mine 540 have a few baddies of my own should be okay in the spring when we want to build - remodel- whatever. working out the kinks.

Re: Help with a Fannie Mae question, house value plumeted.

Lel — Thu, 17 Sep 2009 02:41:36 GMT

Do I understand correctly, that your debt to income ratio is less than 31%? What is your monthly PITI payment - principal, interest, real estate taxes, and homeowners insurance? What is your current interest rate?

If this all represents less than 31% of your income, then you won't get any relief from any government plan. The goal of the Making Home Affordable plan is to get borrowers' DTIs below the 31% threshhold, because this is considered to be an affordable debt burden for a home. If you're already below 31%, then you won't qualify for the MHA program.

Do you have other debts that are making your financial situation tight?

I realize that you are used to a much higher income that you currently have. But in theory, your current mortgage, even with your reduced income, would be considered affordable (assuming that your home-related DTI is below 31%).

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Thu, 17 Sep 2009 06:24:05 GMT

2 things.

if you do a loan modification, it usually will show up on your credit report as modified. I don't know what the standards are going to be, but I doubt you will be able to get an additional mortgage if youhad to have this one modified in the near term. (again that is a guess. But this question is going to come up alot in the near futuer I believe). It would be very interesting what the mortgage professionals think.

As far as a second mortgage, it will be hard to get $ to get teh second house built. From what I gather you are negative equity on the first loan and have limited income. Getting approval for a second mortgage will be tough even without a modification on file.

Re: Help with a Fannie Mae question, house value plumeted.

ShanetheMortgageMan — Fri, 18 Sep 2009 06:54:13 GMT

Well honestly with the credit scores, and the existing mortgage, you aren't likely going to be able to finance a new home... however there is a good loan program out there that will help you finance the needed repairs & improvements to the home you are already in. It's a type of FHA loan called the 203k. There are two versions of it, the 203k streamline and the regular 203k (normally called the "full 203k"), more lenders offer the 203k streamline but there are still a good chunk of lenders who do the full 203k as well. The 203k streamline limits repairs up to $35k, whereas the full 203k can finance as much as you need (up to the FHA loan limit in your county). Most people use it to purchase and rehab a home they will be living in, but it's also applicable if you want to refinance your home as well. Lenders are really looking for 620 scores though, so while your husband looks good your scores are bit under what would be needed... however it sounds like you might be able to hold out until Spring, so if that is the case you'll have enough time in my opinion to get your scores where you need them to be.

You'll find a ton of info on the program at http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm. The loan amount can go up to about 97% (varies by fractions depending on the state & loan amount), and you can pay off the existing mortgage, your closing costs on the new mortgage, and the cost of the repairs/improvements you want to do... as long as it all fits within the 97% limit of the "to be completed" value on the home.

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Fri, 18 Sep 2009 16:22:14 GMT

Wow Shane your are the Mortgage Man! That seems the answer to my prayers, Thanks !!!! My baddies are mostly medical at CA's, for which I have the money ready to pay them, the right way (hippa) to have them removed from my CR. Two are paid judgments and have the money for my lawyer to get them vacated, should all be done well before we are ready, my hubby will be retired by the military within this time frame, so our income will increase about 2k pm, the rest is pay cc down to below 50% ( need only 800.00 to do that should have w/i the month) pay on time, we should both be set on FICO by spring. I'm working for mid 600 for me and 700's for him. We are willing to wait until then, gives us time to save more. we also have around 50k in equity with the land we own and will build on.

If you have any other nuggets of wisdom, do share! Thanks

Re: Help with a Fannie Mae question, house value plumeted.

ShanetheMortgageMan — Fri, 18 Sep 2009 16:45:09 GMT

Glad it helped, just work on those scores and as long as lenders haven't shy'd (sp?) away from the 203k program you should have options.

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Fri, 18 Sep 2009 17:52:08 GMT

Shane, if the house is valued at 92K and the mortgage is at 133K with 70K in repairs needed, would she stand a chance of getting 203K approval? It seems unlikely the house value is going to appraise for the expected loan amount (closer to 200K if there are 70K in repairs needed)

Jusr curious how that works

Re: Help with a Fannie Mae question, house value plumeted.

ShanetheMortgageMan — Fri, 18 Sep 2009 19:57:53 GMT

That's a good question mickie, it'll all be based on that "subject to" value... if that's not enough, unfortunately the 203k wouldn't be an option, and to get out from the debt a sale would need to occur.

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Sat, 19 Sep 2009 00:12:20 GMT

HUH? SAY-GAN? I'm confused ?

OH, good news checked TU score is 727 better than I thought so hubbies must be higher (trying to find out) Thanks again

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Sat, 19 Sep 2009 00:21:41 GMT

if your house is appraised at 92K

and you owe 133K

Then you add 70K on repairs

That means the loan would have to be for 203 K to cover the current loan and the repairs.

An appriaser would have to appraise the value of the house (after all expected repairs are done), at I believe 95% LTV so around 215K

I THINK.

Also, as Shane said, you would be hard pressed to get a second loan for another property with 40K in negative equity and low range scores.

Re: Help with a Fannie Mae question, house value plumeted.

WannaHouse — Sat, 19 Sep 2009 00:35:50 GMT

@Anonymous wrote:
HUH? SAY-GAN? I'm confused ?

OH, good news checked TU score is 727 better than I thought so hubbies must be higher (trying to find out) Thanks again

Was the TU score pulled from here? Make sure you are buying REAL FICO scores and not FAKO scores.

FINANCIALHELP25 (use code when you order..enter on the last page) will give you a 25% discount on your scores from here until Sept. 30th.

Message Edited by WannaHouse on 09-18-2009 07:35 PM

Re: Help with a Fannie Mae question, house value plumeted.

Jazzzy — Sat, 19 Sep 2009 05:26:11 GMT

@Anonymous wrote:
I will try to be short and to the point any help or suggestion greatly appreciated. K- bought our house in 03 for 147000. seller didn't disclose material defects, inspector didn't find them, will cost over 70k to fix. After problems found house is worth only 92k! Took sellers and inspectors to crt and lost because of bad lawyer, and bad IL laws. So in the mean time hubby goes to war, gets injured, now 100% disabled, I lost one of my jobs, (had 2 full time for 9 years) so income greatly reduced, we arent behind in mort, just can't do any repairs, and house is almost condemable. Don't want to bail, bk, or live like a pauper.

I called lender about Pres, Obamas new programs, Don't q for anything because I haven't stopped paying and not in the red, so only option is to hope the mort. co can come up with something, said reduced int. rate. also could possibly Loan modify what should I know that they won't tell me. ?

We need to be able to build a new house in the near future, then fix this one (we have to gut it) and sell, or rent it out. OR build new foundation move the house and rehab it. (big mess)

Anyone know if options warnings caveats?

Thanks so much oh hhi is 54k dti is less than 31%

How do you know the property is only worth $92k? Did you have an appraisal done for the court case?

What type of material defects are we talking?

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Sat, 19 Sep 2009 19:41:26 GMT

C- where should I start?( was our first house we trusted our inspector and the ministers that sold it)

1) The house sits too level to the ground, and the foundation wasn't prepared right, the ground around the house is too level and in fact leans towards the house, so the water aims straight to the house, the crawl floods (i mean FLOODS) during the smallest rain. So the sill plates need replaced

2) to hide it the sellers installed a sump pump in the crawl, and it runs straight into the aeration system, which they

Dug a pit for next to a foundation pier which has caved in so much water enters the crawl that it

3) becomes overwhelmed can't flush during rainy season, and the house fills with a wonderful toxic odor. That's okay cause the piers were improperly done, and don't support it well anyway

4) the vent pipes don't even reach the vent covers outside, the bath fan doesn't either causing a nice toxic mix of mold on the roof decking which

5) has become weak, and isn't properly built anyway so we have sagging the entire length of the house in fact you can actually use our roof for a nice spring board and do acrobatic manuevers which is good practice for the electrical shock you get when

6) the aeration system turns on because all the electrical in the entire house needs redone, the kitchen is entirely wired to one circuit breaker hope your not hungry! use the stove fridge dishwasher and overhead light at the same time or in any combination, and you blow the fuse, dont look for the box in the attic to turn it back on because

7) if the mold doesn't kill you, the fumes from the heater will, that doesn't reach the vent either, but watch out for the electrical lines they aren't properly installed if you kick one you will start a fire!

The P trap in the bathroom is installed upside down so the nice septic fumes have no where to go (yum) the vent tube for toilet ties into the hot water heater, all the plumbing runs uphill instead of down AND is secured with baling wire.

The propane lines were actually secured by ELECTRICAL LINES !

The master bedroom has heating vents that go nowhere so NO HEAT NO AC

WOW Sorry but I gotta stop - makes me want to go hunting -YA KNOW?

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Sat, 19 Sep 2009 19:43:49 GMT

To answer the other parts of your questions, my lawyer hired an architect to find all the issues, the appraisal was done for the case by a licensed appraisal, and NO that's not all thats wrong.

Re: Help with a Fannie Mae question, house value plumeted.

ArmyStrong — Mon, 21 Sep 2009 01:41:56 GMT

.........., my goodness! I have nothing to offered but my best wishes to you!!

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Mon, 21 Sep 2009 01:51:52 GMT

I agree with ArmyStrong. THis whole situation is horrible.

If you don't mind asking, what was the reason the judge ruled in favor of the ex-owners. It seems that the ex- owners, the home inspector, and the home appraiser all had to know to some degree about these problems.

Re: Help with a Fannie Mae question, house value plumeted.

Anonymous — Mon, 21 Sep 2009 14:01:56 GMT

In the State of Illinois the majority of Home inspectors have a clause in their contract that says you must go to arbitration if an issue arises. Arbitration clauses also include a limit for suit. In the case of most home inspectors, this means the price of the Inspection, which in our case is 250.00.

Further the laws that govern home inspectors in Illinois (and many other states) are written in such a way that although an inspector must be licensed, and how many hours of each area they must be trained, there is absolutely no protection for the harmed homeowner. A law with no teeth. It meerly exists to make sure the State gets it's charge for the actual license.

When we went to court the sellers admitted they hid defects, the inspector admitted he saw some of the defects but didn't report them to us because in his opinion he didn't have to.

When a civil law is passed where there is room for interpretation, it takes lawsuits to define how the law is intrepreted. When there is an arbitration clause, the case cannot get to court because of the language of the clause, Therefore, it cannot be tested.

I would tell anyone NEVER WASTE YOUR MONEY ON A HOME INSPECTOR! FIND AN ARCHETECT, TAKE HIS CONTRACT TO A GOOD LAWYER, IF IT GIVES YOU PROTECTION HIRE HIM INSTEAD.

YOUR BIGGEST INVESTMENT DESERVES IT.

The sellers only had to pay for what they accidently admitted to. We got roughly 6000.00 but spent 10,000.00+ on lawyers, depositions, court costs, inspections, and archetects.

The archetect would have only cost us 500.00 to 1000.00. I would have rather spent that to learn it was a horrible investment, than to lose so bad.