Florida Military recieving orders to move.

[js6596]

Hello,
Just found this site and I have been reading for hours now. The info has been very helpful. Thank you everyone for sharing your stories.
I have a 80/20 loan
First 316K
Second 77K
Home purchased in 2007 current house value is 296K according to Zillow.
We can afford our mortgage, but it's VERY tight. I am in the military and am receiving unexpected orders to move the summer of 2010. My mortgage with escrowed insurance and tax is 3600 a month. If we move and try to rent this house we will lose at least 1k a month. Unless the market rises as quick as it dropped It will be many years before my home value reaches a point where we can break even with a sale. With that said we are leaning toward walking away, but we live in FL which is a recourse state. What options do we have and what does everybody recommend<>
Mortgage modification to include principle and interest?<>
Short Sale?<>
Deed in lieu?<>
Foreclosure?
<><><><>How does a Mortgage deficiency judgment work?<>
One major worry is that we could go through all the mess of foreclosure, ruined credit etc, and then in the end we could end up having to give our savings to the bank anyway. <>
When and if should we start the process?<>
What steps does everybody recommend?<>
Thank you.

[jakelabry]

It's very hard to read the last part of your post because of all the code that's showing up!

A modification is going to be very difficult for you to obtain unless you can demonstrate a hardship and you say you can afford it. To check your eligibility for the gov't program go to this link: Making Home Affordable - Home Affordable Modifications. This can determine only your eligibility - it is up to your lender to decide if you qualify - and they are two different things! It's the hardest thing for many people to accept - they go to this link, answer "yes" to all the questions and immediately assume they are entitled to a modification - NOT! The lender has the final say unfortunately and they are being difficult - to say the least! Principle reductions are not happening so get that expectation out of your head.

Your other alternative is a short sale. Given that you have no intention of keeping this house (right?), I think that is your best bet. Get it listed as soon as possible because the lender will want it on the market for 90 days at least before they will consider a short sale. The fact that you are military and have no choice about leaving will work in your favor. There is a fair-to-middling chance that if the short sale is successful, you can settle both loans. Again, being active duty military will help. Keep your command apprised of the situation and seek their help/advice.

Good luck! And, when you get to your new duty station, DO NOT buy another house - be a renter for a while.

[weneedpeace]

js -

Search my posts, as I have our personal story and have already found a few other military members who have also posted on this forum.

Also - vrsam dot com is an excellent resource. Click on forum at the top on his homepage. This is the network for military who are PCS'ing and gives updates on the expanded HAP program.

If you're currently residing in the home, you can explore options to sell by short sale and then submit for a deed in lieu if you receive no viable offers. That is the process that the majority of military members are doing, for those who are underwater with their homes and facing PCS transfer.

We were unable to do this, as we secured military tenants in the home.
We're going into foreclosure now - 19 months after transferring from Virginia.
$1300/month negative loss WITH the tenants in the home. Couldn't get a rental rate that equated to our PITI plus expenses related to the home, including property manager and repairs.. I can not recommend becoming a landlord to other military families, especially if you're up for a deployment after landing at your new duty station or moving up into training. (My husband is facing both - this is a huge stress!)

Once you gain some clarity and direction, keep posting.. There are more of us out there, the stories just aren't on the internet as intensely as non-military borrowers. I think there's A LOT of us suffering in silence but with the HAP program finally opening up this week to begin processing applications, I think military members are going to come out of the woodwork with questions on the program.

Here's the link to it. It's off of an Army DoD site, but don't worry if that is not your branch - this is for ALL branches of the military.
Homeowners' Assistance Program - Department of Defense

[weneedpeace]

FYI -

Based on your original post, if I were in your shoes with the PITI already being tight and a 'next Summer' PCS.. I'd go ahead and work on listing it short sale NOW. Once you're out from under that house, you can still secure a short term lease (corporate apartment or go through a property management company). And, remember, if lease options do not coincide with your timeline, PCS orders under military clause following your notice to vacate policy will work... I would not wait until after the new year to get this started, and would not hesitate to file for a deed in lieu after 90 days of market time.

As an additional resource, if you have a VA loan, you can also call and they can search for your specific VA loan rep. They can also be a resource to you, during this process.

[jakelabry]

Weneedpeace - I checked out your link and it refers to base closures:

"Two things must happen before a HAP can be Implemented in your community
First

There has to be an announcement of a base closing or realignment action which affects your community.
Second

A determination must be made that real estate values have dropped as a direct result of the base closing or realignment announcement."


Wait - I just found it. Temporarily expanded to include service members required to permanently relocate during current mortgage crisis.

[weneedpeace]

Jake - yes, the expanded portion of the program was passed *months ago.. it took this long to get it up and running. It now is no longer only BRAC related PCS moves. The information just went up on the website this past week, however, the grassroots group through VRSAM has been reporting weekly updates throughout the Summer (and really before).. There's already thousands of applications in que waiting to be processed. The *unfortunate in this is that the help was not timely enough to assist the first wave of transfers, those have already long since been foreclosed on.

However, the program may also offer foreclosure benefits which include legal fees paid.

[dan102877]

I posted it in another forum, but there is also a limitation if you have a 2nd mortgage of HELOC. You have to have receipts for each and every penny used or you are not eligible for the HAP program. Now I am screwed...I PCS in May and can't use HAP...what to do now....

[flagirl4444]

I would start working with the bank to do a short sale. Find a good realtor who specializes in short sales. There are tons of short sales in Florida and the banks are getting a lot better about them. We have seen plenty around here, some drag on forever and the deals fall apart. Others close within a couple of months with no issues. Depends on who your lender is. Good luck!