Posted on 02/24/2013 7:36:13 PM PST by ducttape45
I am hoping that someone on FR can help me with a financial issue.
Let me state first out that this is not a request for assistance. I don't want to run afoul of any posting rules or guidelines. This is a request to find out if anyone knows of a resource that I can avail myself to in order to help me.
Also, I know how some of what I will share will sound. I know that there could be some personally embarrassing information to follow. I make no excuses for the situation I find myself in, but I am hoping that I can find help in spite of my current situation.
The situation is this: I am living in a house that is somewhere in the process of foreclosure. Where exactly is still a mystery. I am told that it is now up for short sale but I've been kept in the dark on that aspect of what is going on. What I do know for sure is that the investor has failed to make payments on the house and for the last 9 months I've been living here rent free.
The realtor who I deal with told me that she would like to see the house sold to me. The amount owed on the house is somewhere in the neighborhood of $53,000 but it will short sale for $10,000 - $11,000. I have $5,000 in my savings account. All I need is another $5,000 - $6,000 and I can buy this place. And therein lies my problem.
There is no way to say this except to say this: my credit sucks. I won't post my FICO or credit scores, but they are not good. It doesn't help that I had to file for bankruptcy last year and it discharged in September. I actually have no bills to pay on except for utilities. I do have school loans that are under forbearance until September 2014. So I am in a unique position. Unfortunately, no lender will look beyond their rules and regulations to see that.
In their defense I know the rules are there for a reason and after the recent national mortgage meltdown I can't really blame banks for being much more cautious, but I was hoping that someone would see that I could pay a loan back within just 6-8 months tops and bend the rules a bit.
Please, this is a serious request and I would appreciate no flaming whatsoever. While the facts are the most very basic (believe me, there are many more things about the price of the house, the fact that the house was once part of military housing), these are still details that are personal in nature and I share them only in the hopes that someone can lead my in the right direction.
Moderator, if this post is inappropriate, do what you must. Thank you.
Look for private investors. If the house will truly sell for that low you really shouldn’t have a problem getting a loan since its much less than the value. Have you tried talking to any mortgage brokers? They may also know of some ways to get you the loan.
I’d think you could find a family member who’d personally loan you $5K, and you give them an interest in the house till repaid. They have a loan-to-value ratio better than 10%, so they’re well protected. Make sure it’s in writing and run it in front of an attorney to make sure it passes muster.
Your only hope is to find someone else to buy the place, and then sell it to you.
Have any relatives that could to it?
You hinted at it, but it remains unclear to me. What is the market value of the home?
Whatever may occur - one thing is clear. You are already a winner having lived there 9 months rent free.
To rebuild your wealth, do two things, live below your means, and do not assume debt. Trying to buy this house is to assume debt. Forget the house, take the foreclosure or someone buying your house via short sale. If you have a job, you are a step in the right direction. Rent and quietly save. Use the savings to eliminate any other debts you have. The other reason you want to rent during the time you are trying to rebuild your savings and credit is MOBILITY. If a better job is available in another part of the country, you can pick up and go when renting.
I suspect that the immediate equity should be an incentive to one or more person(s) to assist you. you’re even allowed a “gift” of $12,000 or so per year (I forget the exact amount), provided you attest to it not being paid back... I think you would be far better off dealing with a trustworthy individual than with a bank.
disclaimer: I am not an expert on any aspect of this, it’s just my 2 cents
Wanna warn you that there are some cynical souls here who will criticize you and suggest faults without any basis, tell you that you are whining, and thus and such. Ignore them if they are not helpful.
It it understood that it disappoints to have an opportunity come near but then it looks like you are unable to reach quite all the way to it. However, especially if you have a steady job now in spite of financial troubles in the past, it cannot hurt to advise the bank involved of your interest in the property anyhow. The worst they can do is tell you “sorry,” and then you were where you were before. (And some banks are now offering ridiculously easy terms to people who became unemployed then regained employment; the interest cash cow beats the pants off of a portfolio of unsellable houses in a sluggish market.) If you have work (I hope you do, of course) then maybe whoever becomes the new owner may be willing to rent it to you, or enter into a private rent-to-own agreement. Do not be afraid to ask; the worse that can happen is to be told “sorry.”
God bless, and good luck.
LOL You want the mafia style. They are it. Their interest rates which they keep hidden could be as much as 164%. Stay away.
All the mortgage brokers turn up their noses. Unless I get a loan over $40,000 they won’t give me the time of day.
You might want to see a lawyer about Adverse Possession, laws are different in each state, but generally if you pay all back taxes, liens (other than mortgage), and make some improvements to the property, you may be able to keep it after living there for seven years after filing.
If you have a rental contract, or sometimes even if you don’t, most banks have a cash for keys policy where the bank will pay you some moving expenses up to 1,500.00 if you leave the property in good shape.
You can google these solutions for more accurate info based on your location.
Don’t completely deplete your savings to buy the place. Bad idea. You need an emergency fund to cushion yourself, unexpected repairs to house or car, unemployment, medical expenses that are not covered. You could find yourself over a major financial barrel with no savings even with owning the place outright. Taxes and inaurance don’t go away. Houses are lost to tax sales all the time.
How much was the rent you were paying? That is what you’re “buying” in practical terms until you sell the place. How is the job market where you are, and how secure is your employment or income source?
Pay no attention to what the realtor suggests, she’s going to suggest whatever earns her a commission. Just discount it as self interest right off the bat, put it out of your mind.
You also need to come to terms with just exactly what put you into bankruptcy. Old habits die hard and a “free” place to live could tend to exacerbate a lack of financial self-discipline.
I wouldn’t do it unless I could keep at least two months pay put back in savings, and the combined payment, tax and insurance is less than what you were paying for rent, with a pretty secure income.
are you a vet ? Generally, the Department of Veterans Affairs asks lenders to use the past twelve months of a borrower’s credit history to determine their ability to repay any credit obligation they will have in the future.
The housing is just outside the former Grissom Air Force Base in central Indiana. The housing is, well, an interesting story. Back when the housing was built, someone got the plans mixed up. A base in Florida got the housing Grissom was supposed to get, and visa versa, we got theirs. They got the better housing, Grissom got the worst.
The housing section where I live, as built, is not worth much over $12,000 - $15,000. The plumbing is substandard, the wiring is over 50 years old, and there is very little insulation built into the structure. However, when the housing was opened up, the local realty association demanded that any houses that were sold were not be sold for less than $30,000 so their market wouldn't suffer.
Well, folks in Miami county all see how that worked out. Now ALL THE HOUSING in Miami county is undervalued. I laugh in spiteful ridicule because when the realty association pushed through their request I stood up to them and told them they were wrong to their face and they were inviting disaster. I hate to say I told you so.....................
The market value of the home is priced between $10,000 - $12,000 tops. That's all the physical structure is worth. Honestly, I would say the house is worth no more than $7,000 - $8,000 but that's because I have access to the blueprints and I've seen how they were built and maintained. Not good.
I'm looking at this from the aspect that if I can get this house, it will be paid off with a years time and I'll be in the house that is mine, free and clear. No payments, just the insurance and upkeep.
If the houses are all that bad, then you’d really be unwise to get involved in trying to own one. You couldn’t sell it again for the amount of money that you’ll be paying on it. As time passes, you’ll have to spend money to keep the place shored up. It’s one thing to try to restore a fine old house that has good bones, but this place, you say, was crappy from the first day. It’s going to be a money pit.
This is just a very bad idea. Consider yourself lucky that you’ve had nine rent-free months to get your life together and refresh your savings, and forget this “deal.”
Even if you had the down payment, a bank or mortgage lender still might not place the loan. They do an inspection beforehand, and poor condition, structural problems, or serious building-code violations make them reject loans.
Count your blessings.
Man! Talk about a depressed housing market. That’s worse than Detroit. What were you paying in rent? What are the annual property taxes?
I would not buy unless tax values are in line with actual market values. I was reading on other threads that 42 percent of homeowners in Detroit do not pay their taxes. Why should they? The taxes are higher than the home is worth. And the city has no reason to foreclose.
Being that you are in a severly depressed housing market, I have to assume other markets like the local economy and job market are down too. Look. You’re already getting a free ride living rent free. Continue to sock away money you would be paying for rent and keep living there rent free. I imagine the bank is happier having you in there to maintain the place rather than having it sit vacant.
I just don’t see this as a good buy. And as I’ve said - you are already money ahead living rent free.
God Bless.
I am not trying to be mean spirited, but you have no business owning a home. If you cannot come up with another $5k, and your credit score sucks, then move out and get your financial act together. Get more of a war chest. Pay off your debts. Pay your bills and do not focus on getting yourself into more debt.
Many of us have been where you are. My wife and I walked away from our first house in 1990. Rates were high and I got transferred. Our daughter was just born.
Two months ago our net worth exceeded one million for the first time.
You can do this. Just take your time and leave within your means.
I am not trying to be mean spirited, but you have no business owning a home. If you cannot come up with another $5k, and your credit score sucks, then move out and get your financial act together. Get more of a war chest. Pay off your debts. Pay your bills and do not focus on getting yourself into more debt.
Many of us have been where you are. My wife and I walked away from our first house in 1990. Rates were high and I got transferred. Our daughter was just born. We had $53 to our name. That’s-$5-3, fifty three. We stopped on the way home and had a $100 dinner...just to make sure we were completely broke. And we started again. From zero.
Two months ago our net worth exceeded one million for the first time.
You can do this. Just take your time and leave within your means.
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