Hi, I'm new around here and have learned so much reading the forums and I wanted to get some opinions on if a short sale is in my best interest right now...
I live in the bay area California where I bought a 922sf 2bed/2bath condo in Aug 2006. I am in a 30year fixed loan with 3 additional silent deferred payment loans. The main ($314K remaining) and 2 smaller seconds ($12K and $8K) with CalHFA and a down-payment assistance loan with the city of San Jose for teachers ($40K). In total I am more then $100K underwater compared to current sales in my complex.
I lost my job in 2010 and while I was getting unemployment we were able to keep current. Recently, my unemployment benefits have run out and I have resorted to staying home with my young kids to offset the cost of very expensive child care in my area. After reviewing our budget, to keep current on our mortgage we would have to make considerable cut backs (even more then we already have), like top ramen and hamburger helper for dinners for quite a while. My wife works and we can make the payments but the total housing expenses are over 40% of her gross income. It will definitely be a stretch but is possible. However, I still do have some cash reserve in savings (about $25K).
Even more-so then the money is the space we have just outgrown, with having 2 kids and a dog, 922sf with no garage just doesnt cut it anymore for a family of 4. We originally planned to have upgraded in size by now but obviously we have been stuck here and can't get out. I would love nothing more then to be able to get out of here and into a place with more space and storage.
I have looked into the HARP program and apparently our loan isn't Fannie or Freddy owned so I do not qualify for a refinance. I'm not sure what CalHFA could offer as a modification or if it would even be worth trying. I'm leaning heavily to try and short sell or just walk at this point. Although I'd rather not have the forclosure hanging over me and my record should I wish to purchase again.
So, if I SS or forclose, could the bank come after my cash or other assets (401K, 529, IRA's)? That's what I would be most afraid of if I did end up short selling or forclosing. And in reality, what are the timelines to be able to buy a house after a SS or forclosure?
I'm also concerned about that City of San Jose down-payment assistance loan for teachers and if it's even possible to settle on a loan like that. Has anyone had experience with that kind of loan?