Help with failing home!!

meg_tay_g

LoanSafe Member
Oct 18, 2018
1
0
0
I'm looking for options and opinions on my home with a failing foundation.
We bought a home that was built brand new almost 4 years ago. It was at the very top end of our budget looking back at it now I can't believe they even gave us the loan. We got the loan with a local mortgage company and within the first month they sold it to Wells Fargo. We are under 30 and have always had excellent credit and never missed a payment on anything. A few months after moving in my husband got a new job making more money and I got a good raise at my job so everything worked out with the cost of the house.
Everything went really well for 2 years we got some landscaping done with a sprinkling system installed. The house is at he base of a hill in a desert climate with clay like dirt. we also had alot of rain that year. We started noticing some structural changes. Cracks in the drywall, doors not closing anymore and some small cracks in the unfinished basements floor. We found out that this type of damage is not covered by homeowners insurance. We contacted some foundation repair companies and engineers to get some recommendations on solutions. We were advised that if it’s going to continue to get worse its best to start repairs as soon as possible but there was also the possibility that the settling could stop and everything would be fine if the movement was under two inches so to wait six months and see how it goes. We decided to wait because the repair companies were suggesting piering the foundation and the cost is very high and just not something we can afford. But now with the weather changing we are seeing more problems and we need to move forward. We are very concerned with our financial situation. We have always been in good standing and we only have one car payment and a credit card we pay off every month. my husband just signed up for a student loan and we have a second kid on the way which will double our daycare and add other expenses.
Here’s a list of our options that we know of and we are just looking for suggestions for which is best for us.
  • Pursue our builder or inspectors. There are a few things that the engineers told us that make us think they might have known of the problem before the house was sold to us. We only had a one year warranty so not sure if there is anything we can do.
  • Move forward with the foundation repairs. We have gotten a few quotes from a few different companies the prices are very high and we can’t afford them on our own and is it even worth it when the cost is almost half of the homes value. Some offer financing but we don’t feel like we can add a payment that big to our current bills and it will put us even more upside down in a house we don’t have any equity in. We also might be able to work something out with the companies where we do some of the work ourselves but I've also read these can fail and could we sell after the house is fixed?
  • Contact our lender. We could contact our bank with a few different options. First we could let them know of the damage and ask for a refinance but we don’t have any equity and we can really afford to up our payment, I don't want to be tied to this house forever. Ask for a short sale or a deed in lieu of foreclosure. Or do a foreclosure which we really don’t want to do anything that’s going to leave us in a bad situation but if its best to walk away at this point then that’s what we will have to do. I've researched short sales and deeds in lieu of foreclosures so I know how tricky they can get.
  • Any other options that we do not know about that you can suggest to us.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,107
181
63
San Diego, California
www.loansreduced.com
Hi Meg_tay_g,
Can you please give me a call when you have a moment? I have a solution that I recently did with another borrower that needed foundation repairs.

If you have good credit and can qualify for a traditional loan, we can go for a renovation loan. Don't worry too much about the equity in the home because the appraisal will be done as "After Repair Value" - meaning they will value the home after the repairs are complete instead of it's current condition.

These loans I actually specialize in, I have actually written about many of them here within the LoanSafe community. I am also licensed Nationwide and can guide you through what is needed to make this happen. In the meantime while you repair the foundation and other items, if you want to update your kitchen, bath or anything else it would be a great time to do that.

The best number to reach me is my mobile - 619-379-8999 or feel free to e-mail me as well at: [email protected]