ScubaSteve

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With the real estate market at rock bottom, has anyone had to foreclose? I'm asking because I live in the 3rd highest county in the US for home forclosure, and it's really screwing up my home value. I have to move in 8 months, and it looks like we can't afford to sell....the house is already about $75K-$100K depreciated. There's a bank-owned property 500 ft from my house that is a bigger floorplan and is selling for $233K. We owe $325K Renting might not get us what we need to cover the mortgage either....with prop taxes, HOA, etc. we'll be eating around $1500 a month.

Foreclosure is a possibility for us....after researching it, it's not as bad as it sounds. Lenders 99% of the time aren't suing borrowers to recoup their losses because of the time/cost involved. The other 1% are folks with significant assets, which we don't have It mainly just damages your credit....which we really don't use. It may keep us from buying a home anytime soon, but we plan to save for the next few years to get a huge down payment and just start from scratch.

I just wonder if anyone has any recent first or second hand experience?

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Fingers

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That is the saddest thing I've heard in a long time. I can't imagine having to just walk away from a $325k home. Sorry to hear about your troubles. You have no choice but to move? If it's work related, does your work guarantee the value of your home? I know mine does if the move is forced, so you might want to look into that.

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Professor Frink

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That really sucks. Hopefully the housing market will correct itself soon and things will turn around. I'm lucky enough to live in one of the few areas where housing prices are still going up, but I don't know for how long.

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ScubaSteve

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I'm in the military and have to change duty stations. We are financially stable and both of us are working. We have a good income. The problem arises when I show up at my next command and have to try and afford 2 houses. This was our first home...we knew there was a risk...there always is when buying a home. It's a shame because it's a great little condo (granite, hardwood, etc.) that is going to be a great investment in about 5-7 years. Too bad we can't hang onto it.

Southern California literally collapsed this past year. This is an AWESOME time to buy, though. I'm seeing 6 bedroom bank foreclosures for 200K. Wish I woulda been buying at this time vs. 2 years ago.

ScubaSteve

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You guys are in the bubble. Somehow VA/NC are completely oblivious to the rest of the US....it seems everyone else is hurting. Take a look at this...especially the chart: http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=3609&accnt=64847

Bruscar

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Argh. You honor us by serving your country and this happens. Are there any gov't programs that help?
Being in the car biz (sorta), I've seen people with higher credit scores than me (700-ish) 2 years after BK, foreclosure, etc. It does stay on your credit a long friggin' time, though. And it does affect your costs in more ways than you are aware. Now even insurance companies are basing their rates on your credit score. Obviously you want to foreclose as a last resort, but, meh, who's life is linear anyways?

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Fingers

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Is there any way you can soak up the losses into your next mortgage? Maybe the bank will let you do that rather than have you let them foreclose. I'm really surprised the military will let you take a hit like that. I mean, they're forcing you to move and this is definitely a moving expense.

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david_42

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I haven't had to, but a couple friends got caught in the 1987 collapse. Two former GF included. One had only been in a condo for 6 months when her husband got laid off, so they walked and lost the $40K she had saved while living with me (that was before she got married).

I was in the Navy in Bremerton, WA, when I got transfered about 5 months after buying. I didn't default, but was forced to re-roof the place when I sold it, so it was a wash.

As far as the future goes, 25% down & no one cares what your credit looks like.

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ScubaSteve

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We'd be happy to break even. Unfortunately there's no way we could make what we need from selling (let alone pay a realtor to sell it...FSBO probably wouldn't be good for this delicate situation). To be honest, I'm reluctant about talking with my command....we have a legal department (JAG), but they pretty much just handle wills and courts martials. I have heard rumors of other military people that work on base that are going through foreclosure and nothing has happened to them....but they have kept it pretty hush-hush from the command. Usually these types of things negatively affect you, especially when you have security clearances involved.

ScubaSteve

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Damn. I went over 1,000 posts. Don't worry....I'll leave something nice mod edit-fight club rulesfor my HBT peeps. I'm at work now.

I think being in the military will probably give me more bargaining power with the lender....but part of me doesn't WANT to be tied to the house. I'm all about holding up my end of the bargain, but I can't afford to take a monthly loss for the next few years. We've got our first born due next month, and I really want a clean slate.

I've heard about short sales and deeds-in-lieu where you basically give the house right back to the bank and they recoup their money by selling it. The trouble comes when they don't make back the full amount on the loan, and they try to come after you for it. I've read that this almost never happens in California, as the lender can legally make one course of action (Sue/Not Sue) and 99% of the time they'll choose not to sue because they end up spending more time and money paying lawyers and paying holding costs while in litigation. They'd rather take the loss at sale and get it over with. I imagine that suing people causes them to go bankrupt, and the bank will never see their money if that happens.

I guess I've read all these things on my own, I'm just looking for someone who has actually seen them take place recently. I would hate to get thrown for a loop.