Single parent w/ 1child considering foreclosure as option 19 posts by 10 users

Posted: 10/16/2007 at 12:58PM

Hello All,
Thanks for the great info you provide on this site. I am a single dad with 1 child. I have full custody of my child and our home. I have been through a divorce and custody battle. I am not getting child support, x is incarcerated. The bills are too much and I am considering letting my house go into foreclosure. I have thought about the " short sale" option, but they can still can come back after the seller for the remainder after the sale. This is not an option I am interested in. I am not fully aware of Ga. laws. I am current on all 3 loans, but sinking fast. I have had my house for sale for past 3 months. The market here in Ga. is horrible. There are more homes new construction and re-sales than there are buyers. Frustration and Stress are no longer wanted. Can someone tell me besides the BLOW to my credit score, which is nothing new trying to do it all alone. What else negative is there to fear about letting it go into foreclosure? Also should I call the 1st mortgage company and tell them I am going to let it go into foreclosure? Any information is greatly appreciated.

Thanks

Posted: 10/16/2007 at 02:03PM

I say your best option would be to price the sale of your home so that when it sells that you brake even. In this sense you can dump the property faster and you don't have to worry about the lender coming for unpaid balance. I do hope you figure out what to do and I hope your house sells soon enough, thanks for you time Kool!

Posted: 10/16/2007 at 11:30PM

Contact the bank immediately and tell them your situation. They may be willing to work with you. The expense of foreclosure creates an incentive for the bank to help you.

Posted: 10/17/2007 at 06:23AM

Kool, you actually mean the " loss mitigation" department. They're the ones who deal with loans that are in default. If you're current on your payments, they won't yet be handling your loan. But, you can still call and talk to whoever you get and try to end up with the right person.

Loss mitigation is exactly who an investor would talk to about a short sale. They're the ones who approve the deal.

You might start with the third loan. If you do sell it for less than the total of the payoffs, the first mortgage will get paid first, then the second, then the third. Sounds like you're close to being able to pay them all off, so maybe the guy in back can take the pain. An investor might end up dealing with all three, but the second and third would get hit harder than the first. With two other loans, the first may expect all their money.

The price of the house has nothing to do with what you owe. Sorry, but that's the way it is. If you're pricing it based on your loans, you may be pricing it incorrectly. In many places, three months on the market is not very long. But, if you want to sell quickly, you'll have to price the house right based on recent sales and other houses on the market. If you overprice it to cover your loans, it may never sell at that price. You and your realtor friend need to figure out the price based on the market, without consideration of your payoffs.

Jon

Posted: 10/17/2007 at 12:33PM

Hi Kool,

You have hit a number of the items you'll have to pay when you sell. You'll also have to buy title insurance. These days, its very common for sellers to have to pay a portion of the buyers closing costs. While this doesn't directly affect the price you get, it does affect the buyers net cost and your net proceeds. If this is common in your area, you will be effectively pricing your house higher if you don't do this too. Your agent probably has a title company she will use for this transaction. Ask her to have them work up a preliminary HUD-1. That's the sheet you get at closing with all the details of the transaction. You should get this a few days before you close anyway, but it may help you out to have it now. That should be very close to what you would actually get.

Again, what you owe just doesn't matter when setting the price. I know that's weighing on your mind very heavily, but set it aside and take a hard look at the price. If houses are moving in your area, make yours the best deal in your neighborhood, and it should move quickly. If sales are really slow, you may have to make it a great deal to get it to move. But you MUST forget about what you owe when setting the price.

Then, see where that leaves you for net proceeds after the close. The three lenders will not let you close if you don't pay them off. So, there's really no question of them coming after you later. They will block the sale. Under normal circumstances in a situation like this you would have to bring money to the closing to make up the gap. Is that possible? Meaning, do you have or can you get the money to make this up? If you can, even if you have to borrow it, that will give you the best outcome. If not, at least one of the lenders is going to have to be convinced that you can't pay the money and have no chance of being able to pay them the money in the future. That's the discussion an investor would have with the lenders to negotiate the short sale.

Once you have a realistic price and your net proceeds, you'll know where you stand as far as paying off the loans. Hopefully, its just the third where you're going to come up short. Then, I'd call them up and say: " I'm trying to sell this house. When I do, I expect to be xxx short of being able to pay you off. I have no assets and no way get the money to make this up. What can we do?" Honestly, I have no idea how this conversation will go. If you owe them 50K and you're going to pay back 5K, it may go nowhere. If we're talking about 10K short out of 50K, it may go better. Maybe they will do a loan with you to pay off the shortage. Maybe they will get very nervous and start the foreclosure. But, it sounds like you're about to this point anyway.

Have you been getting showings? What has the feedback been? Do you have the place all cleaned up, decluttered, and painted and in move-in condition?

Jon

Posted: 10/24/2007 at 06:20AM

Why haven't you pressure washed it to make it look as nice as possible? Why not spend a weekend or two and put a fresh coat of paint with some new colors.......fresh, clean, new, priced exceptionally well, market the hell out of it, and it'll sell.

Posted: 10/25/2007 at 09:48AM

Hello,
Did you know if you have a job with steady income, this is another way to stop your foreclosure? You can negotiate a loan work out or forbearance with your lender and get caught up and without further damaging your credit. You just need to show that you can afford the mortgage payments. However if you are not working at the moment but expect to be working soon you can file a chapter 13 and work out a payment plan until you get caught up. This will affect your credit but not a bad as if you become late on your payments or your accounts go to a collection agency. For more information on how to do a forbearance,please contact me

Posted: 11/07/2007 at 10:30AM

Kool,
Do contact the lender and see what they can do to help you. Please don't get sucked into paying a " foreclosure consultant" anything to make this call for you. Here in CO, the law was changed to make it impossible for a foreclosure consultant to get any payment from a homeowner in foreclosure. Foreclosure consultants can still make contracts with homeowners, and try to work out solutions with the lenders. But, very specific disclosures are required, and those disclosures make it clear the homeowner can back out of the contracts with the consultant at any time and pay nothing, even after a deal has been worked out. Doing contracts without the disclosures can result in jail time. That should be the law everywhere, but it isn't.
Jon

Posted: 11/16/2007 at 01:35AM

Very interesting, just following the post.

Good luck to you. You have gotten some good advice.

I do not think gotten is a word, just a little humor.

E.

Posted: 11/26/2007 at 10:28AM

kmmr12, can you provide me with more information? i am a newbee, so i can't send private messages yet. Thanks in advance!