Loans, Debt & Credit - View Single Post - Okay...we decided last night to take the plunge....walk away or short sale?

luckythirteen · 04-09-2009, 06:43 PM

Hello,

Here are the particulars right off the bat so you know what is out there for us.

State of WA
Purchase price of $445,000
Current value of property is $360,000
1st of $359.960 interest only at 6.525% (adjusts 8/09)
2nd of $87,700 ......30 due in 15 at 10.25%
payments total $2,792 a month

Both of these loans were purchase money back in August of 2006 and I have never refinanced.

My lender is Saxon Mortgage on both loans and I filled out their loan worksheet and sent in all paperwork that was requested for a loan modification and it was denied on both due to too much debt to income.

I pay my taxes and insurance on my own and neither is overdue, although the first half of the taxes are due in about a month or so.

I have never been late on either of these two loans and am making the decision to not make my April payment at this time.

I am married, but the house is not in my wife's name, and I bought it before we got married.

Together we have over $70,000 in unsecured credit card debt which we have never been late on either with payments totalling $1650 a month.

In addition we have two car payments totalling $850 a month and student loan payments at $382 a month which are currently in an unemployment deferrment.

My income in 2002-2007 was over $150k a year, and the company I worked for went belly up. It took 4 months to find a new job at a much lower wage, but we used savings to cover the difference. I hated that job and quit after 8 months and found a new job I absolutely loved after 2 months with an income of about $125k a year. Our savings got depleted and we used credit cards to cover differences in things and we probably did not adjust our lifestyle downward since we are now knee deep in CC debt.

That great job I got in 3/08 is now gone as it was a startup company and they cut 80% of the employees. I am now unemployed and getting $2160 a month in unemployment, while my wife's take home is about $2,300 a month.

If we are willing to take this all the way to foreclosure, but stand to gain a lesser hit to our credit reports by short selling through an experienced agent in short sales, doesn't this seem the best route to take? I will not be able to live in the house rent free for as long, but the longer return on this decision will most likely mean I can purchase a new home sooner. Is this correct?

I want to maximize my ability to live here a long time and save money, because I do not know how long it might be before I find a great job again, but also do not want to jeapordize our future at the same time and the ability to find a good rental. (although my wife's name is not on the mortgage)

Our plan was to get it modified, find a renter, then go into a debt management plan for the CC stuff, but that is on hold I think because we don't want to trash the credit if we need to find a good place to rent.

thanks in advance for your thoughts and responses!!

04-09-2009, 06:43 PM	#1 (permalink)
luckythirteen Member Join Date: Apr 2009 Posts: 13 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Okay...we decided last night to take the plunge....walk away or short sale? Hello, Here are the particulars right off the bat so you know what is out there for us. State of WA Purchase price of $445,000 Current value of property is $360,000 1st of $359.960 interest only at 6.525% (adjusts 8/09) 2nd of $87,700 ......30 due in 15 at 10.25% payments total $2,792 a month Both of these loans were purchase money back in August of 2006 and I have never refinanced. My lender is Saxon Mortgage on both loans and I filled out their loan worksheet and sent in all paperwork that was requested for a loan modification and it was denied on both due to too much debt to income. I pay my taxes and insurance on my own and neither is overdue, although the first half of the taxes are due in about a month or so. I have never been late on either of these two loans and am making the decision to not make my April payment at this time. I am married, but the house is not in my wife's name, and I bought it before we got married. Together we have over $70,000 in unsecured credit card debt which we have never been late on either with payments totalling $1650 a month. In addition we have two car payments totalling $850 a month and student loan payments at $382 a month which are currently in an unemployment deferrment. My income in 2002-2007 was over $150k a year, and the company I worked for went belly up. It took 4 months to find a new job at a much lower wage, but we used savings to cover the difference. I hated that job and quit after 8 months and found a new job I absolutely loved after 2 months with an income of about $125k a year. Our savings got depleted and we used credit cards to cover differences in things and we probably did not adjust our lifestyle downward since we are now knee deep in CC debt. That great job I got in 3/08 is now gone as it was a startup company and they cut 80% of the employees. I am now unemployed and getting $2160 a month in unemployment, while my wife's take home is about $2,300 a month. If we are willing to take this all the way to foreclosure, but stand to gain a lesser hit to our credit reports by short selling through an experienced agent in short sales, doesn't this seem the best route to take? I will not be able to live in the house rent free for as long, but the longer return on this decision will most likely mean I can purchase a new home sooner. Is this correct? I want to maximize my ability to live here a long time and save money, because I do not know how long it might be before I find a great job again, but also do not want to jeapordize our future at the same time and the ability to find a good rental. (although my wife's name is not on the mortgage) Our plan was to get it modified, find a renter, then go into a debt management plan for the CC stuff, but that is on hold I think because we don't want to trash the credit if we need to find a good place to rent. thanks in advance for your thoughts and responses!!