Sell or Not to Sell Home

Hi Tammy, I'm really sorry you are going through all of this but I would strongly advise against just walking away and giving the house back to the bank. That decision will haunt you and affect you for many many years to come. Good luck.

I would never succumb to foreclosure unless I was incompasitated. (sp?) You need to ask your bank if they will accept a short sale. They probably will. The best thing to do is to stay in the house - wait till the economy recovers and then sell. This is a buyers market. Anyone with money - right now is the time to buy. And since more people are renting now - rents are higher and if your wasting that money renting you should be investing it in a house instead. That money you put into your home each month is like a bank account. As long as you don't borrow anything else against it - your money will be there. With rent you might as well just open up the trash can each month and throw it in. Because your helping someone else's bank account.

Do you have a husband? Can he fix some of these things? If not go to the churches. Don't ask for money - ask if they know anyone that could fix broken pipes. Ask for specifics. Maybe even ask on here.

I sell Real Estate and the statute of limitations in Missouri is so many years from the "finding" of the problem. (check with an attorney) Im just wondering what's different since the warranty company wouldn't pay. I have seen people with things that go wrong and unless you have money to retain an attorney and are prepared for going all the way through the process and then the other guy could be in the same boat as you and not have any money to give you anyway.

As for agents that haven't done anything for you it's hard to say they are the best! Im not - I've been raising my kids on my own and couldn't rely solely on Real Estate. But as far as that goes "Show Me the Money". :)

God Bless,
L.

Not sure what country Angel lives in but I would ignore her completely. Obama does not have the power to change laws. Banks and credit reporting agencies are still private agencies not within the control of the government. If you walk away from your home you will have bad credit for at least seven years. This means forget about getting another home, forget about a new car, forget about credit cards. There is little sympathy for the people who are walking away from their mortgages.

What the government has done is set up a fund through Fannie and Freddie. If you owe more than your home is worth, are at least two months behind on your payments, and your payment is more than 50% of your gross income you will qualify. Your lender has to agree to write your mortgage down to the value of the home. Any increase in value that happens after the mortgage is transferred is the property of the government.

Go to a Christian Financial Advisor. If you are in St. Charles Co go to Harvester Christian Church.... they have many types of counseling and many times it is free! You want to do what is "right" all way round. I have just prayed that you will get thru this, Tammy. Trust the Lord. But also find a godly counselor. Could you rent the house and then rent somewhere yourself for a period of time? There is an answer...pray sinderely.

You still have a roof over your head, so that is good. It may not be as sound as you'd like, but if you can afford the payments, it may not be as bad as it seems. You didn't state the year of the house, or the amount you paid for the house. Right now all homes that were bought three years ago are worth less than what the owners paid for them. It's not just your house. Have you consulted a structural engineer? They can give you the lowdown on what really needs to be fixed to make your house sound & how much it will cost. Always check out your own restoration companies as they may have "friends" they are trying to send business to. Check out the civil/structural engineer's background (cv/resume) before hiring them as they are usually around $500 for a basic inspection. If they can find someone at fault then there is more expense to write a report on your behalf. A restoration company in your area is CATCO, in the St. Charls area is Servicemaster & Repairmasters. I'm sure there are others but they are a place to start with. You also haven't stated what you would do if you "gave your house back to the bank". Your credit will be ruined. Don't make any rash decisions at the moment, but compile all of the information you can & if walking away is what's best for you - then that's what's best. I'm sorry I don't have better advice, but I can say that as being a first time home buyer at the age of 22 to a home that at the time was about 30 years old - I have felt like I was in over my head many of times, but I can't live anywhere else cheaper than what I am paying for my house & I will own it one day - & all of the repairs that went along with it (leaking basement included - fixed & is leaking AGAIN!). I hope everything works out for you one way or the other.

There is something called surrendering the home in lieu of foreclosure. In reality it's not much better than foreclosure. It still looks bad on your credit and the bank would have to be willing. I don't know anyone that has done it. It's just something they taught us about in real estate school. It saves the lawyers fees etc.

If you let the home go to foreclosure they bank will sell it and any short sell will still be something you owe. They will hound you for the difference. BUT, just so you know, if they sell it for more they are to forgive the loan but don't have to give the extra back to you. I'm not sure what if any tax consequences there are to having a loan forgiven. If you do this, it will stay on your credit for 7 years. Because our stupid law makers decided to do so many bad things with credit laws like...saying that lenders can look at our reports and raise our interest because of problems with any of our accounts, you will suffer long range effects. Any credit cards you have now can hike your rates all the way to the maximum because of giving back that home. AND, when you buy a car or get a home in the future it would be difficult to do it and your interest rate would be sky high. Many employers check credit before you apply for a job and our credit scores also raise or lower our car insurance! That is one of those STUPID decisions that our law makers made. It's totally and unreasonably unfair!

Sadly, what you are describing is a problem that stemmed entirely from a terrible type of heating system and you would have saved yourself a lot of heartache if you had just ripped it out or left it in place and used another type of heating. Those little oil filled heaters are very safe, they work, they are hot to the touch but not hot enough for the baby to hurt themselves on. They roll around on wheels and it wouldn't take many to heat the rooms you want to heat and keep the basement warm enough to keep the pipes from bursting.

I honestly don't believe you should walk away. Your credit will be in the toilet for at least 7 years. I know we have lost money on our homes. But it won't last forever. The house prices will bounce back. As hard as it is to face, we needed this as a country. The way house prices shot up was ridiculous and hurtful. People can not and should not be making tons of money off their homes! That's great for people when it happens....it feels great on the surface. But it's like taking from our children's futures because it makes home ownership and rents go sky high and in essence it's STEALING from our children.

If home prices start to climb back slowly and people pay their mortgages down, then in time people will break even and even pay off their homes so that they can make a little money off of them in retirement. THAT is what it's meant to be. People were never meant to make large amounts of money on homes in the space of a few years!

We have lived in many types of homes. We had a new home and it was surprising how fast things went wrong. After just 2 years in that new home we sold it because we needed to move for a job. We had to do 5000 worth of repairs to get the place in shape for a quick sale. We rented a mansion in California. That house was gorgeous! We got it at a good price because the people were working in England for a year. It was so fun that we couldn't resist living in a 3000 square foot home, sprawling on 3 acres with a gigantic in ground pool and 5 fire places and 5 bathrooms with 6 toilets and even an outdoor pool bathroom. BUT... everything in that dang house would break and it was like pulling teeth to get the management company to fix things. Some things they just refused to fix making the luxury home a night-mare.

Right now we have a leak in our ceiling we have had for 3 years and we put towels on the floor when it rains. We have a cracked foundation that is slowly getting worse. We've spent all we can on the things that we had to like rewiring the house because we wanted to be fire safe and we had termite damage needing fixed and more termite damage still needing to be fixed. Yeah, it's hard. But we still get to have the pets we want, not have to answer to any landlord and people still tell us they like our home. We do the best we can with what we have and someday we'll be able to fix it at least in time to leave something of value to our children. Right now our front porch light is hanging down precariously because it's broken and we have to go get a new light. It really is a pain all the little and big things that come up! BUT...you do have the tax deductions of interest on your taxes and that's good. AND, with your newborn son you will have a nice tax credit next year and his tax exemption and maybe even the unearned income credit. If you can hold on until next year you will have a big enough tax return to install a better heating system.

I don't know how many floors you have or what kind of basement to know if you would have easy access for installing duct work. If you can't install a regular heater because of the price, you could fix this system or you could install those heater/air conditioner units like they have at hotels. I know a 2 story house we almost bought once didn't have central heat and air and they said it would be 10,000 to install it from scratch. Those hotel units are about 2000 dollars. But there are probably other options. There are electrical strip heaters that look like they were intended to be in the house, placed at the baseboards and they need to be hardwired in electrically. That would probably be the cheapest and would allow each room to be heated to the temperature that you need or want for that room.

I hope whatever you do works out for you. If you do give it back you'll just have to hang on until it falls off and make sure you take advantage of small credit cards that are designed to start rebuilding your credit. But keep the balances low and pay them on time so that you can start to bounce back.

Suzi

In this market selling a home is not going to be easy. Selling a home with the problems you have mentioned is going to be even more difficult. Your credit score will take a huge hit if you default on your loan, which will make caring for your son more difficult. Not to mention all of your interest rates will go up, on everything else as well.

The winter sounds like it has been rought, but the weather is warming up. Fortunately for you the cold days are almost over.

The economy is really rough right now but that might be in your favor. Lets say you decide to keep your job. There are a lot of people out of work right now who may have just the experience you need to get your place fixed up. Being out of work makes a person hugry for a pay check. It makes finding a good handy man a great bargain. you wont want just anyone, get references and check them out very well!

It was a rough winter but there are other options to walking away from this home. There are also great programs out there right now to help with people who are struggling financially. you may qualify for help in fixing up your home. Do some research.

I hate that things are so bad, but I also believe that things could be a lot worse. You have a home, many people have lost theirs. You may be surprised at what you can find in the way of help.

Wow, just checked in and was very shocked by Angel's post.
(Angel, you need to get your facts straight before you walk away!)

Back to Tammy, can you find any legal recourse because this sounds like a total non-disclosure case. I know it's been three years, but there may be a statute of limitation on this. Check with a real-estate agent and see what they think, or get on line and see if there are any legal services that can help you. Something smells rotten here...

Sure makes it hard to enjoy your new little one with this kind of stress, huh? Hang in there and keep us posted. Good luck and congrats on your son!

You can try to do a short sale. Call your lender and ask for the short sale department. It may take a couple transfers but you'll get there. Tell them the hardship you're in and how you can not afford to fix everything and make the payments and that the market value is less than the amount of the loan and they should send you some info on how it works. You then call an agent and tell them you want to do a short sale and they will gather the comps and then list it as-is as a short sale. You will have to report everything and any offer that comes in you sign for and then it gets turned into the bank for their approval which could take a little while. Keep making your payments for as long as you can so you don't have missed or late payments on your credit score. The bank pays the realtor and it shows on your credit score as 'settled for less than owed.' It will drop your score for 2-3 years but it won't destroy it like a foreclosure for 7 years as long as your credit is good now. We are doing one on our house and had an investor out in an offer it within 24 hours of listing because he knew the agent so now we are waiting for the bank to approve it. I can give you the agents name if you are interested.

Good Heavens! Sorry Tammy, I really don't have any advice, but I'll quit complaining about my money pit! Even though we had to pay an additional $15,000 dollars just 6 months after we moved in because of structure/foundation issues, have had to replace the roof, had that rotten masonite siding covered up with a fresh coat of paint, etc. it really isn't that bad and we've managed to stay on top of things.

I will keep you and your family in my thoughts and prayers and pray that you find the answer you need to keep your family safe and happy.

In good health,

Lori K

Call the best real estate lady I have ever come across: Georgianne Skid ###-###-####. She is amazing and will shoot straight with you... wish I had known her when I had to choose an agent. I've had my house on the mkt for almost 2 yrs with the "BEST and most successful agent in KC," who has done very little to help me sell, and at this point we've had to lower from 1.2M to $800... rediculous (in divorce situation, so I am unable to change, though we've had 3 offers and she's not been able to close one of them.) Get educated and choose the right agent and it will make all the difference. GS has earned ALL of my future business with her integrity and hard work when she has earned nothing from me yet.

With the way Obama has things set up right now, you can walk away from your home (foreclose) and it won't hurt you or your credit in the least. I would just walk away if I were in your situation. My DH and I were talking about this same thing a few days ago, and if he looses his job for any reason (he is a web programmer) we would just walk away from our mortgage and it won't hurt us financially at all.

Make sure you or someone in your family does a lot of research.

Check out www.DaveRamsey.com he might have info on his website about how to proceed.

It sounds like you should have some recourse somewhere in this - even if it's just non-disclosure.

Best of luck to you!
K.

Tammy,
I am sorry to hear about all your problems with your home. I would get a professional and nonbias opinion. Here's the one key thing to keep in mind...if you let the house go to foreclosure, you will not be able to get another home loan that has a rate that you would be comfortable with if you could even get a loan for that matter. Hopefully someone on this site will get you some information as to someone who would be a good professional to consult with. ALWAYS GET MORE THAN ONE OPINION!!