Zillow Advice: Loan Modification - Should I go into foreclosure and walk away from a home that has depreciated 57.2% since 2004?

Before making any decision ...

Wed, 08 Jul 2009 05:01:00 GMT

Before making any decision you NEED to see a real estate tax attorney and/or at the very least a CPA. You need to think long and hard b4 making this decision. You need to understand implications not only from credit but taxes. I certainly can understand your frustration. Short sale may or may not be the answer for you. Foreclosure will definitely hurt your credit and so will a short sale. Depending on what state you live in will depend if the banks can still come back after you for judgment for the losses they incurred. Short sales are based on hardship. Most banks now are really scrutinizing the hardship. They may very well allow a short sale BUT they may put language in the short sale approval letter to reserve the right to come back after judgment. There are many things to consider. Is your loan(s) original purchase loan? Did you refinance and take money out and use it for other purposes than the home? You might be able to perform a deed in lieu. You can usually get a consultation with a real estate tax attorney for around $300/hr. There is a lot more to discuss but not enough time or room here. Many agents automatically say short sale when in fact a short sale may make things worse. I will tell you the banks are coming back to sue. Especially on the 2nd loans and heloc's. Even though california is a non recourse state, the first cannot do double jeopardy but you may very well have issues with the 2nd or Heloc's. Just know what your entire options are and seek competent advice from CPA or real estate tax attorney then make your decision when you have reviewed all options.

The "moral" issues of foreclosure, ...

Tue, 07 Jul 2009 01:28:00 GMT

The "moral" issues of foreclosure, loan modification or a Short Sale: Should a stock trader not sell a losing stock when the price drops because it will hurt another person's IRA? Do banks have any "moral" responsibility for this crisis because they created and sold loan products to Americans which didn't make long term economic sense and ultimately severely hurt the real estate market? Should the very politicians who promoted and supported the banks in creating these toxic loan products throughout the 2000's to promote home ownership take any responsibility for this outcome? Should people become slaves to their houses/lenders because the market for real estate crashed almost 50% from the price peak through no fault of their own?Should a mother or father do what is best for their family, or should they do what is best for other homeowners?Free markets will work this out by everyone doing what is right for their families. The housing market will find a new pricing point.

Also take this into account: the lenders are now restricting loan payments to 38% of income and the new loans are fully amortized. You need twice the income today than you needed in 2007 - house prices are adjusting so people can buy them again.

Don

if you do not find any info ...

Mon, 06 Jul 2009 22:03:00 GMT

if you do not find any info I will keep you in mind, there might be a new program coming up. but don't move out of your home til you get the eviction notice, meanwhile save some money you may be needing it.

do not forget to go to knpr.com

Raul

I would sugest you ...

Mon, 06 Jul 2009 21:58:00 GMT

I would sugest you to go knpr.com and you will be able to get some public info. every case is different.

good luck
Raul

I couldn't care less what ...

Mon, 06 Jul 2009 21:53:00 GMT

I couldn't care less what your financial situation like others say. People seem to think its a financial decision. It is a moral one. If you don't have a problem morally or socially with taking hundreds of thousands of dollars out of a strangers account and dissappearing, go ahead and go into forclosure. I am of the opinion that 100,000 dollars is always 100,000 dollars weather it belongs to your neighbor or a bank. Fraud is fraud, theft is theft. I wouldn't be friends with someone who rapes, murders, or steals 100 grand.

You are in the same position ...

Sun, 05 Jul 2009 13:58:00 GMT

You are in the same position as millions and millions of Americans. You owe way more than your home is worth or is likely to be worth even ten years from now. I suggest you go look at rental homes right away. See what is out there (since you'll need a roof) and who knows, you may be inspired and alleviate some of the stress. If you have credit cards now, you'll keep them. Your interest rate will likely go way up, but you will still have sources of credit if necessary. Buying a car is still going to be very easy. Again, the interest rate won't be advantageous, but you can still buy a car. SInce nobody here knows how far underwater you are, nobody but you can determine what best suits you financially. I am not an advocate of walking away when things get bad but I am responsible enough to know that there is a point where walking becomes necessary. Protecting your family is a sign of integrity and should be first onyour priority. Don't be fooled by anybody else who insists that ownership is something to be proud of. There are so many other things that are more important to be proud of, like protecting your family.

A Short Sale would be your ...

Sun, 05 Jul 2009 00:41:00 GMT

A Short Sale would be your best option, in my opinion. Contact a real estate agent in your area but make sure they are experienced in debt settlement: a Short Sale is more about negociating debt settlement than a home sale. Many agents don't like them for this reason.

Go to anaheimnewsletter.net and read "Help for Homeowners" and "Don's Corner" to become more informed. It is a big decision, I know, I had to Short Sale my house.

I think it will be much better ...

Thu, 02 Jul 2009 15:56:00 GMT

I think it will be much better for you to short sale the home. Normally it will show on your credit as settled but you can always negotiate with the bank to show something different.
It's much better then foreclosure or deed in lieu.

Good Luck.
http://homesinsale.com

"when the market improves, ...

Thu, 02 Jul 2009 14:09:00 GMT

"when the market improves, then sell..."

Yeah, whatever... take a monthly loss for 20 years, then maybe you can break even on the sale price...

How long does bad credit last?
How long after foreclosure till you can buy again?
How long will it take for a home down 55% to recover?

I think the last portions ...

Thu, 02 Jul 2009 08:08:00 GMT

I think the last portions of your statement are truth. You don't feel safe and yet that is what a home is truly for. If you can rent out, then do that and get something smaller and manageable to make up the difference you pay out on the remaining monthly payments that the renter does not cover. When the market improves then sell. That should give you peace of mind and still have integrity. On the flip side, the Gambler says " you gotta know when to hold 'em, know when to fold 'em...." But that has the consequence of hurting your credit and financial future.