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I Must Escape This House (payment)!

Peter PrinciplePeter Principle Registered User regular
edited February 2011 in Help / Advice Forum
Here's the tentative plan:

1) Ask Wells Fargo to approve a shortsale

2) They of course deny

3) I miss a few payments

4) Shortsale to my 'rents, super lowball or whatevs

5) I continue to pay mortgage, but lower payments than I make now.

Comments, suggestions?


Alternate plan:

1) Sell house to my parents.

2) They stop making payments.

3) I get away from this hell pit with my credit rating intact. Parents lose nothing but their credit rating.

Comments, suggestions?

"A man is likely to mind his own business when it is worth minding. When it is not, he takes his mind off his own meaningless affairs by minding other people's business." - Eric Hoffer, _The True Believer_
Peter Principle on

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    ArbitraryDescriptorArbitraryDescriptor changed Registered User regular
    edited February 2011
    4) Shortsale to my 'rents, super lowball or whatevs

    Problem: The bank has to accept the offer. My understanding of short sales is that the bank will set the price, then accept bids for months and months before even acknowledging them. Then they pick the best one; if any. I don't believe step 4 to be viable.

    ArbitraryDescriptor on
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    ArbitraryDescriptorArbitraryDescriptor changed Registered User regular
    edited February 2011
    Can I ask why simply asking your parents for a loan isn't on the list? If they have the money (and inclination) to bail you in this way, can't they just give you a loan instead?

    Is this a temporary short fall, or is your situation just unsustainable for the foreseeable future?

    [Edit] I ask because my friend is a real estate attorney, and he's going to want more information. But rather than get proxy legal advice from a stranger, you might be better served consulting with a local real estate attorney. They should be able to give you a plan, and the consult should be free. In my experience they tend to hate these institutions, and could be eager to help or offer advice.

    ArbitraryDescriptor on
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    MushroomStickMushroomStick Registered User regular
    edited February 2011
    I'm not really in the know about this stuff, but both your plans sound like they might be considered to be some sort of fraud. I'm not saying that's your intent, just that the bank might see it that way.

    MushroomStick on
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    XaquinXaquin Right behind you!Registered User regular
    edited February 2011
    I doubt your parents will want to ruin their credit rating

    Xaquin on
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    KyouguKyougu Registered User regular
    edited February 2011
    Bank won't allow short sale to parents, relatives and often friends. They verify all that.

    It's pretty much done to prevent the sort of thing you're doing.

    Kyougu on
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    DeebaserDeebaser on my way to work in a suit and a tie Ahhhh...come on fucking guyRegistered User regular
    edited February 2011
    Xaquin wrote: »
    I doubt your parents will want to ruin their credit rating


    That and taking out a mortgage with fuck all interest in paying it back is fraud.

    Deebaser on
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    ThundyrkatzThundyrkatz Registered User regular
    edited February 2011
    1. Short sales take forever and a week to go through. as often as not, they take so long that they go into foreclosure.

    2. You are assuming that Wells Fargo is not going to look into what you are doing, and will just blithely go along with your plan. This constitutes a financial loss for the bank, be assured that they will try their best to avoid that.

    3. I am assuming that you are underwater on your loan, and will not be able to make the payments going forward? Go talk to the bank and see if there are any federal programs that you qualify for that could help lower your payment without engaging in fraud.

    4. If your parents are willing to attach themselves to your problem, are they willing to help you make up your shortfall until you can get your feet back under you?

    Thundyrkatz on
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    adytumadytum The Inevitable Rise And FallRegistered User regular
    edited February 2011
    I'm not really in the know about this stuff, but both your plans sound like they might be considered to be some sort of fraud. I'm not saying that's your intent, just that the bank might see it that way.

    Bingo.

    Trying to arrange a below-market sale to a family member in order to screw an outside lien-holder?

    adytum on
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    DisrupterDisrupter Registered User regular
    edited February 2011
    Shortsale to my 'rents, super lowball or whatevs

    How does this help you not owe money to the bank? Like...if your parents pay you 50k and you owe 150 k its not like you pass the 150k morgage to them, you still owe that. If the bank is not willing to do a short sale it wouldnt be willing to do so regardless of who is buying

    An option may be your parents taking out a morgage of their own, buying your house as an investment property and then tanking their own credit by not paying. But why should they tank their credit instead of you?

    Maybe try to rent the place out, pay morgage with rent and then live in a crappy apartment yourself?

    Disrupter on
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    Dr. FrenchensteinDr. Frenchenstein Registered User regular
    edited February 2011
    yeah neither of those plans will work out for you.

    Talk to your lender about getting a mortgage modification. They might be able to help you. However, there are tons of horror stories about them. Like the bank wont consider you until you've missed some payments, so you miss some payments and then they start foreclosure and can't modify your loan. If you are planning on renting for the next few years, you might be ok walking away from it. sucks but a lot of people are in your exact situation. good luck!

    Dr. Frenchenstein on
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    Peter PrinciplePeter Principle Registered User regular
    edited February 2011
    Some more details:

    First house purchase, I did not act wisely. Let the (now ex) wife handle the entire bidness, and she chose poorly. I got stuck with this millstone in the divorce.

    It's a 1970's mobile home, and we bought it in July, 2006, if that tells you anything about the quality of the home and how much I paid and at what rate.

    It's a VA loan.

    Right now, I owe about $50K more than the house is worth (according to the govt auditors, have not paid for an actual appraisal).

    I have talked to Wells Faygo about government programs, refinancing and so forth. Not eligible for any goverment programs. Can't refinance if the house appraises for less than something like 105 or 108% of principle. I can apply for a hardship whatevs reduction, but that's a 7-16 month process (or more) according to the dude at the local WF branch, and may result in zipassnothing. I also understand IRS laws are changing at the end of 2012, that if you shortsell then the difference counts toward your income. If your house is 300,000 and you shortsell for 250,000 on Jan 1, 2013, your income for 2013 goes up $50K. So if some sort of shortsell is a realistic option, I'd like to take advantage of it before I get raped by that particular dickwolf. From what I've read here, doesn't sound like that's likely.

    A 200 point (or whatever it is) drop in my parent's credit rating would hurt them far less than me. They own their house and aren't taking out any loans any time soon.

    I can make payments (as long as I don't get fired or laid off, of course), but it's a hefty chunk of my paycheck. I'd much rather spend 25% of my after CS+taxes income on a mortgage than 50%, and it sure would be nice to spend it on a house that isn't going to collapse in 10 years.

    Peter Principle on
    "A man is likely to mind his own business when it is worth minding. When it is not, he takes his mind off his own meaningless affairs by minding other people's business." - Eric Hoffer, _The True Believer_
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    adytumadytum The Inevitable Rise And FallRegistered User regular
    edited February 2011
    Forgiven debt is almost always taxable, it's just that the debt relief act is expiring.

    FYI.

    adytum on
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    MichaelLCMichaelLC In what furnace was thy brain? ChicagoRegistered User regular
    edited February 2011
    I can make payments (as long as I don't get fired or laid off, of course), but it's a hefty chunk of my paycheck. I'd much rather spend 25% of my after CS+taxes income on a mortgage than 50%, and it sure would be nice to spend it on a house that isn't going to collapse in 10 years.

    Bolded for bad assumptions.

    Sorry for your troubles, but there's nothing good or wise about any of these plans. Get a lawyer with real-estate or bankruptcy experience.

    MichaelLC on
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    ceresceres When the last moon is cast over the last star of morning And the future has past without even a last desperate warningRegistered User, Moderator mod
    edited February 2011
    Asking your parents to take a massive credit hit when you can afford your current payments, especially when you can't see their future in a crystal ball any more clearly than yours, is pretty douchey.

    This is all pretty terrible, and I hope you find an honest way to better your situation, but no one here should be helping you do what you're trying to do as it is.

    ceres on
    And it seems like all is dying, and would leave the world to mourn
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