Credit lines

[Anonymous]

Thanks everyone.   It sounds like they might let me keep some credit cards even if I get foreclosed on.   Thats good to hear. 

[Anonymous]

Deebee, you said you would default on the cards.     I would be defaulting on 20k of cards to get out of the house clean.   Then I would get apartments.   I would still have a roof over my head  if I kept my perfect payments on the cards and got foreclosed on.   I can't afford the house anymore.    

If if you were an apartment landlord, would you rather see a perfect credit card history and a foreclosure?    Or 20k in credit card defaults and a paid off sold house out clean?   One other person said they would rather take someone with the foreclosure and good credit card history.   So now I'm getting conflicting opinion.  

[Kevin86475391]

I'm so sorry you're in this tough situation. Unfortunately it doesn't sound to me like there's a way out that can save your credit. Although I certainly hope someone else can come up with a viable solution for you.

The short answer is, yes, I think there's very little chance that your creditors won't begin closing your inactive accounts and balance chasing you down as soon as you begin missing mortgage payments.

My suggestion would be to try to get out of the house ASAP and to begin making other arrangements now before your credit takes a hit. Find an apartment and sign a lease now before you miss a payment. If you're going to change jobs try to do it right away so that if they pull your credit it, it'll be before you take the hit. I know that's much easier said than done because I'm sure this is a really stressful and exhausting, but I think you really need to try to steel yourself to make the most of the next couple weeks (or however long you have) before things escalate.

The reality is that you'll probably have to start over with your credit and expect to wait the full 7 years (10 if you do a Chapter 7 bankruptcy) before you re-establish your credit. It's terrible, but it's not the end of the world. You'll get through it.

Good luck.

[Anonymous]

That's interesting you mention signing an apartment lease now before Missing any house payments.   What makes that decision tough is.    I mght have still qualified for the apartment after missing 12 house payments and before the foreclosure.   So by staying in the house for a year instead of an apartment  I would have saved $8500.   In sum, if I knew I could still qualify for the apartment after a year of missed house payments that would be the best choice because I would save about $8500 in free rent 

[Anonymous]

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@Anonymous wrote:
I'm so sorry to read this OP. I don't know how old you are...

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He said he had a perfect credit history for 25 years so it's a good guesstimate that he's over 55; I would try to get some help with some organization. I wouldn't be surprised if there was some organization that can help him keep his home. There's nothing to lose to find free sources.

[Anonymous]

I'm 48.   There is no way I can keep my house I am way short on income.    My 22.5k Ssdi income is way too low for a loan mod they declined me. 

[Anonymous]

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@Anonymous wrote:

I'm 48.   There is no way I can keep my house I am way short on income.    My 22.5k Ssdi income is way too low for a loan mod they declined me. 

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If you aren't religious, I would go around and act religious and hopefully you'll fool someone to help you out to keep your home. You can be a zealot for a month. I am not joking; there are numerous rich and helpful people in the religious sector. Hey, it's survival of the fittest, so you can't just give up. Use your brains and brawn.

[Kevin86475391]

That's a really good point about living in the house until the foreclosure and saving on rent. I guess more than anything what I was suggesting is just getting all your ducks in a row as much as possible before the foreclosure. If you're going to stop making housing payments in the interim then it might also make sense to set aside as much as you can. That way when you are foreclosed on you can apply for an apartment and basically say, "I know my credit is shot, but I can pay for 6 months' rent upfront."

[NRB525]

OP, sorry to hear about the situation. It sounds like you have some difficult decisions to make.

As was pointed out earlier, one of the most critical pieces of information to know is, are you in a recourse state or a non-recourse state?

Also, does your state require a court order to finalize the foreclosure, or is it simply an administrative procedure that follows a set of steps the mortgage company can do?

If it is non-recourse, then you can likely live in the house with minimal cost.

If it is recourse, then you may be on the hook for some value you can provide.

Either way, likely best to get some advice from a local credit counselor, someone who is non-profit and not going to try to sell you something or "take care of your payments" for you and then run away with your money.

[Anonymous]

I live in Illinois and it's a recourse state.   They have to go through a judicial process to foreclose.   They can also sometimes get deficiency judgments against you after foreclosure.   I think I can be sued if I don't pay my 50k heloc too since I signed a promissory note.   Helocs are usually recourse according to my google search.  Thanks everyone for your concern and advice.