October 19, 2010,
N.O. asks from Canton, MI on April 26, 2009
Should I Foreclose on My Home?
My husband and I have been living in our home for almost 6 years. We love our home and we have done alot of work to since we bought it. I'm grateful that we both have jobs and can afford our home every month (well almost). But the situation of ours is similar to that of everyone elses, we cant sell our home because we owe more on it than it is worth.
The next situation is this. I have 2 boys. 1 will be starting elementary school next fall. Since the housing crisis, many homes in my area are selling at a foreclosed rate of under 100,000$ and with that the neighborhood is going down hill. I see things everyday and say to myself "is this were and who I want my children to grow up with?"
My neighbors next door are slobs. The people next to them fight and beat each other up all hours of the night. The people next to them have children who my no question will probably end up in juvie sometime in their life. Across the street from them is a single mother who doesn't work and seems to either be drunk everyday or medicated one of the two. These are all people that have just moved in within the year mind you. It's getting more and more frustrating to see this everyday.
I would love to move but obviously cant sell my home. I would consider a short sale, but I undertand that you have to have special circumstances to qualify for that. My husband refuses to consider foreclosure because he has a bond with this home, and doesn't want to screw up our credit report either. sometimes I feel like our credit score isn't as important as our boys. The way I look at it is that we can probably live in our home mortgage free for at least a year before we have to leave. Save all that money and just rent in a better neighborhood with better schools for a few years until we can buy a home again. ya it's gonna suck but we'll get by.
Has anyone done this before and if so, how did it turn out for you?
Does anyone have any advice or suggestions?
3 moms found this helpful
So What Happened?™
Thanks everyone for your advice. The only thing I can say is this...if all of you that feel that being in a neighborhood that you didn't approve of for your children to grow up in and that all you needed in life was just great family values then everyone would move to were it was cheapest even if it meant next to drug dealers and gangs. Lets face it people, we move to areas to raise a family in neighborhoods that we approve. If life was that easy then we'd all live in cheaper neighborhoods in cheaper houses with cheaper taxes. Truth is, thats not how it works. Not by a long shot. Please dont tell me that you would move to inner city detroit with a high crime rate next door to a crack house and all you need is family values. I'm sorry but thats just naive. I guess I would've thought from mom to mom that I would've gotten much more kindness and support but I guess not. Some of you are just flat out mean. I've read responses in the past about foreclosure and many of the same rude mean comments were made then. Shame on you ladies. Were here to give advice and support to one another. It's hard enough to raise kids in today's society let alone pay for a home, utilities, clothing, food etc.... And by the way ladies, please dont give me the "well if you weren't prepared for responses then dont ask the question" bit. If I would've known some of the nasty responses I would've gotten, I would've never asked the question. Even if i disagreed with someones question or idea or situation, I would never be so rude...never.
D.L. answers from Detroit on April 27, 2009
Hey N., I haven't read all of the responses you got, but I did read a couple.... between those and reading your update I can see you didn't really get advice. What you got was the cold shoulders of people who are too cynical to see straight. I raised 4 kids...3 from my first marriage and then a fourth in a doomed relationship after my divorce....and I so totally agree with you; raising your kids in a neighborhood that's filled with "trash" is an uphill battle~ to say the LEAST. I would do just about anything to get my family to a decent neighborhood. I worked 60 hrs. a week (while I was a single mom) just so I could live in an apartment that was in a decent area.... yeah, I sacrificed some time with my kids... but at least I didn't have to fear them running into druggies and derelicts everyday. I have been reading a lot about people who want to move, but cannot, for similar reasons to yours. The solution for many is to rent out your home(to respectable people)while you either buy or rent another place~ 'till the housing market bounces back. I've read that there are already signs that the market will be creeping back up(slowly)so you may be able to sell your home in a couple of years without losing equity. I would do some serious searching online for someone who's got a little expertise in this area.... but by all means honey.... don't give up. There's always an answer when you're willing to work for one. Your kids are worth it.... so is your family life.
Good luck sweetie, msg. me anytime!
1 mom found this helpful
M.C. answers from Detroit on April 27, 2009
Just a thought...I don't know if this is possible for you, but if it does get very bad in your neighborhood and you have no choice but to move, have you considered possibly renting out your house while you live elsewhere? You could hire a property manager to act as a landlord; they usually take first months rent and 10% of the monthly rental fee. That way, you could earn income from your home, paying mortgage still, but maybe making a little extra. I've heard rentals are big business now.
1 mom found this helpful
S.M. answers from Saginaw on April 27, 2009
Hello N., Stick with your hubby on this one. Once you forclose on a home, buying a new one isn't going to happen!! No bank is going to lend to either of you again. Do you think you will get better neighbors renting? Good luck with that. People are falling on hard times right now. Maybe the single mother is on overload as a single parent facing forcloser herself(not by choice). Report the domestic violence every time it happens, there is a woman who needs your help! The slobs, well, there are city laws, report them also if there are health risks involved, otherwise look away. As far as the bad kids on the block, you will find that in most neighborhoods, even upscale ones. Try reaching out to these kids and being a good role model in their lives. The only people we can change is ourselves. Your children are watching how you live your life, so model love and compation, not hate and pregiduce. And if you are tight on the budget right now, you could join all of the others who are financially over their heads and end up with nothing in the end. Children need stability, harmony(disagreeing with hubby), and predictability. I hope this has been more helpful than harsh. Good luck.
1 mom found this helpful
N.B. answers from Detroit on April 27, 2009
We ran into a similar situation, and we rented out our other home and got a $360.000 home in Shelby Twp for $240.000 3 years ago before the housing crisis. We have successfully kept our other house rented. Since so many people are forclosing they cannot get loans to buy a house, so they need to rent. That is an idea for you. Good luck.
1 mom found this helpful
M.P. answers from Detroit on April 27, 2009
I agree with your husband, don't foreclose. Here is the thing, it takes a year before a finance company/bank forelcoses on a home.
Have you considered renting? That is taking a chance but might be an option for you.
The other thing is PRAY. Pray that your neighbors' lives will change in a positive direction. The power of pray is amazing! Also, I truly believe things will get better. Continue to be grateful for your family and your home. Again, it is amazing with these thoughts, what can and will happen for you.
Peace and blessings,
1 mom found this helpful
T.A. answers from Grand Rapids on April 27, 2009
If you let your house go into foreclosure it will go on your credit report and follow you for a long time. When you rent you need to fill out a credit application and the foreclosure will be on it, which will make most landlords think twice about signing a lease with you.
I say stick it out and who knows in a year or two the housing market may rebound. Keep paying off your debt and when the economy finally turns around you will be in a good position. Neighbors come and go, the bad ones may move on soon, you never know.
If your not happy with the school system you can drive your children to a different district through the Schools Of Choice Program. I do it, my children go to a neighboring district that is much better than the one we live in, and its not that big a sacrifice for us, especially with the piece of mind that comes with knowing that your doing it for your kids.
Hang in there and think very carefully about what your next step is, you don't want to do anything that you may regret later.
1 mom found this helpful
P.D. answers from Detroit on April 27, 2009
A couple things, both require listening to experts over rumors:
Short Sale -- Talk to an expert relator.
I know two of them, personally, that have studied the laws of, and performed, short sales extensively. That is something you want... not someone who just knows what someone else says, but actually have gone thru the process. Both are Keller Williams Agents.
Teri Gunn -- She sold me my house, and always checks in on me (good way)
Steve McConkie -- Business colleague, and all around good guy
Choose Bankruptcy over Foreclosure:
If you have a secondary mortgage, you can have the extra mortgages removed (poof vanished) if you file Chapter 13. And even if you do not have a secondary mortgage, a BK could eliminate your other debt that will keep you afloat. Use this option if you are truly under water. And again, talk to an expert.
Charlie Schneider is an ACCREDITED bankruptcy attorney. That means he puts the extra time in to pass extra tests to prove his knowledge grows with the law. (In Michigan, the only test you have to pass is the Bar, and it doesn't matter if you took that Bar in 1882, 1926 or 2000. Once you're a lawyer, no more test -- and oddly enough laws change everyday).
1 mom found this helpful
S.D. answers from Detroit on April 27, 2009
If you want to move so badly then try and sell your house..even if you have to take a HUGE loss on it, it is WAY better then foreclosing! That is the worst idea I have ever heard...I agree with what others are saying. Or try and rent your house and then rent some other place for a while.
1 mom found this helpful
K.D. answers from Detroit on April 27, 2009
Please take everyone's advice & your husbands and don't do this. You are concerned about what your kids are witnessing via the neighborhood-but what about in their own home? Foreclosing on a house that you can still make payments on is downright WRONG & it is teaching your kids that FRAUD & STEALING is ok. How do you think that will look to a potential creditor or employer when they look at your payment history. They will see that you foreclosed even though you were working and pulling in the income to make the payments. This is just being irresponsible just because you "WANT" to move. There are a lot of people who would like to move for one reason or another, but they are doing the right thing and sticking it out. My husband and I and a lot of other people on this board are working their tails off to pay for other people's financial irresponsibilty. Who do you think will pay for the foreclosure in the long run? I can totally understand that people run into hard times & legitimately cannot make ends meet-but that does not sound like your situation.
Sorry this probably sounded very harsh-but this is extremely frustrating to hear about another foreclosure because of "wants". I know of two other people who did this-rolled in a bunch of credit card debt into thier home a couple years ago, bought a bigger, nicer, better home and walked away from the old house that they couldn't sell. All the while we are working 2 jobs to get ahead and stay in our house and honor the committment that we made...even though there are houses in our neighborhood that are currently selling for less than 1/2 of what we paid for ours. Do what you think is best for your family-but I know that the "credit report" issue would be one of the last things on my mind-it would be more like my consience, honesty & integrity that is at stake.
1 mom found this helpful
K.H. answers from Detroit on April 27, 2009
It is a horrible idea to willingly foreclose, not to mention dishonest. Right now, you need to count your blessings. Be grateful you have a home, be grateful you are employed, be grateful you can pay your bills, be grateful you have good health. We are all in a similar situation with negative equity in our homes and failing-to-thrive neighborhoods. It is the TIMES we are in, not just you.
1 mom found this helpful
S.C. answers from Lansing on April 27, 2009
I completely agree with almost every response I've read so far. To have the bank foreclose on your home because you CAN'T pay the mortgage is one thing. But refusing to pay it when you are able to, just so you can move into a better neighborhood is flat out wrong!!! What makes you think you can just refuse to pay a debt that you owe when so many others are struggling to do the right thing? You're so concerned about what the neighbors are teaching your children...what are YOU teaching them by doing this???
Actually, none of this matters anyway because you need to understand that if you force the bank to foreclose on your home, you not only will be unable to buy another home, you will have a VERY difficult time finding a place to rent. Landlords do not want to rent to people with bad credit...and they don't have to! Why should they? If you didn't pay your mortgage, why would they think you would pay the rent? A relative of mine just went through bankruptcy and foreclosure and they had a terrible time finding a place to rent. Eventually they found someone who didn't check their credit and were able to rent a place...however it was about 25 miles out of town. The kids had to change schools, there's now a huge commute to work...not an ideal situation!
1 mom found this helpful
L.H. answers from Detroit on April 27, 2009
Please don't do this - it will only make the situation worse and will NOT fix anything. You could get the same type of neighbors anywhere you move so please don't make this about crummy neighbors.
The only way to go into foreclosure is to stop making payments on your house and to me, that's immoral and unethical if you have the money to pay for it. It's taking the "easy way" out.
1 mom found this helpful
D.H. answers from Detroit on April 27, 2009
It's a little disheartening that there are people who are using this housing situation to shirk their responsibility. If you can make your housing payment then you should. The idea of living in your home mortgage free for a year while you save money to get yourself in a better neighborhood is nothing short of fraud. We have a home that we paid off completely for 150,000 that we would have difficulty selling for 100,000 if we had to. I figure that is what we agreed to pay when we bought it and do not regret paying it off. You can imagine how it would irk those of us who have taken our commitment seriously to see so many other people trying to get out of theirs especially when they have come up with a scheme ahead of time to live mortgage free.
1 mom found this helpful
K.B. answers from Kalamazoo on April 27, 2009
First, I would check with your bank or credit union. Credit Unions are less likely to work with you, but banks are more like to take a loss than have another house foreclose on. They are loosing a lot of money with houses sitting on the market.
I might also suggest looking on the internet for help. I know their is assistance for some that are having their house foreclosed on. So, it might be something worth looking into.
I sure believe if you think you can't pay the mortgage and want in a better neighborhood....you should really explain that to your hubby. I hope he understands. People are worth more than money.....especially your kids. I wish you the best of luck!
A.S. answers from Detroit on April 27, 2009
To me everyone is running to the same problem, you are going TO pay more to rent in the nicer neighborhoods. IF you can't afford your payment now and your just get by. And to me where their are renters their a problems just the same.plus, it's fraud i think if you foreclose with money save in your bank account. you have the money to pay.think about if you are going to have to go to court and make sure you have a good case. . That you don't have the funds to pay the payment. YOU HAVE TO BE CAREFUL ABOUT THAT. Just things to think about. Good luck to you and your family.
D.J. answers from Detroit on April 27, 2009
i lost our home to forecloser due to lost of income. i would reccomnd you try to go for short sale. your credit score drops drastically. the forecloser on your credit can stop you from a lot of rentals getting a car at lower interest rate. i dont know the numbers but mshda and macomb county cooperative extension has programs and litature that can help you
S.D. answers from Grand Rapids on April 27, 2009
if you foreclose, it will take YEARS before you can get another house. and you might be waiting 5-7 years before you can do that. Yes of course neighbors can be annoying, but you can use them as examples for you kids, as what you DON'T want them to do. then they can see how not to act, and what not to do.
You can't chose your neighbors anywhere. So even if you chose to move somewhere else, that doesn't mean you will have perfect neighbors. you will have another set of possible problems with them. If you live close enough to another school, and don't like the one your in, you can chose to send them to the other school. The friends they hang aroud with, will influence them more than the neighbors do. so you should just be involved with their friends.
J. answers from Detroit on April 27, 2009
I am with everyone else on this one... Don't do it... I live in a very nice neighborhood in Macomb, MI and our street had half a dozen foreclosures on it. I had one right next door to me. The house was going for under 100K and I was VERY WORRIED about the type of family we would get moving in. We are very lucky!!! Nice family, nice kids. Actually the person who owned the house before this family was MUCH WORSE!!! The rest of the houses that sold so far we haven't had any problems with. But to walk away from your home is irresponsible, especially if you "can" pay for it. I'm sure it leaves a bad taste in other's mouths that have no way out and will be foreclosed on or have already been foreclosed on.
Just know that these people may eventually be gone due to foreclosure of "something" else.
J. in Macomb
C.V. answers from Grand Rapids on April 27, 2009
I have a friend who just forclosed on their house. they are having a hard time finding any place to rent. Most places say no once they know they have a forclosure on their credit. They have had to go through family to help them find a place to rent. So if you were to forclose you might not find something to rent that is any better than your neighbors now, maybe worse. Plus my friend had to be out of her house after 5 months, not a year. My husband and I have always wanted to move when our kids are in school because of the district we are in now (GRPS). Well now we don't know what to do because we can't sell our house either. There are company's that you could pay to rent out your house and be like the landlord so you wouldn't have to worry about it. Or if you could find someone you know to rent out your house you could move somewhere else until the market turns and then you could sell your house. Anyway, good luck and know there are many people in you same situation.
N.W. answers from Detroit on April 27, 2009
FYI, the foreclosure will stay on your credit for 7 to 10 years. It will be very hard to buy something new in two to three years.
It will also affect your insurance rates, your ability to buy or lease a new car, your credit card rates and availability.
W.Y. answers from Detroit on April 27, 2009
I read a majority of your responses and have to ask why would you willingly do this when so many unwillingly HAVE to? Just because home prices are getting cheaper, does not necessarily mean the future homeowners are getting trashier. Have you tried to get to know your neighbors? I grew up in a HUD neighborhood and granted, some of the neighbors were questionable, but not all of them. Teach your kids to "love thy neighbor", not pass judgement on them based on what they observe. I am by no means trying to bad mouth you, it is just very frustrating to me to hear you would actually consider this. My husband and I live in a 2 bedroom mobile home with our 2 year old daughter. Was it the place of choice for me to raise her? No, but it is what we are stuck in for now. I would LOVE to be able to jump into a house now, but like everyone else, we simply cannot afford to right now. We are both working full time, trying to pay off some credit cards, and have a plan to get into a house before she starts school. I would also LOVE to get back into college, but cannot afford to right now...maybe in a few yrs I can, but just not now. My point is this, we all have things we WANT to do, but have to live with and make the best of what we have now. So please, rethink your decision and make the best of the moment now. That is the best value you could teach your sons.
T.D. answers from Detroit on April 27, 2009
I can't believe someone would honestly consider living in their house for a year, KNOWING they could afford it, and still not pay their mortgage. Incredibly immature and inappropriate. Think of the people you'd be screwing in the end (your neighbors, the kids, the rest of society, the mortgage company). When you took out the loan, you knew how much it would cost a month, right? Pay it!
M.H. answers from Phoenix on October 19, 2010
I'm in your same position. Only my husband is the one that want's to foreclose. I agree it's an option, and for the same reasons you do, but I also agree with your husband, but only about the credit reason. I'm trying to find the best solution too. Like you, it's more than family values. My daughter has a great stable home, but she's not always in our present, and the integrity of the people in her life, (her age and older) will have an influence, good and bad, whether we want it too or not. My husband and I work too hard to rely on the school systems to step in when we're not around. And they simply can't. So many of these "naive" moms (wonderfully put, by the way) don't seem to realize or fully understand, what life is like for our kids when we're not around. So, to heck with them. I might not agree with my husband fully, but I can't really blame him for what he thinks. We were both victims of intercity life and barely escaped. My mother worked her butt off and moved states to put me and my siblings in a better school system. God bless her for it too. I hate to say it, but money is an inoculator that has it's advantages (that's what my husband says). I hate to do it, and I think it will really be hard, and the repercussions will be big, but I think foreclosing is an option we just can't ignore anymore. We've tried EVERYTHING, but there is no help for those who are not behind, but are JUST getting by. Which is us. Ah, me. Good luck to ya babe.
J.R. answers from Grand Rapids on April 27, 2009
N., please do not let your home go into foreclosure. You will literally DESTROY your credit history for no good reason -- and this will impact your family for years and years. It is a horrible situation to be in and I can't imagine voluntarily putting your family through it. Wait a few years until the economy picks up and then try to sell your home.
L.K. answers from Detroit on April 27, 2009
I agree with the other Moms & your hubby - don't do it! I lost my own home to foreclosure and had to file bankruptcy and I know firsthand that you don't want to go either one of those routes if you don't have to. And what you need to remember is that the grass isn't always greener on the other side. These things that you perceive as issues can come up no matter where you live. Focus on the good things in your life; the rest is insignificant. Best of luck to you!
R.B. answers from Lansing on April 27, 2009
I too bought a house 10 years ago in what I thought was a nice quiet neighborhood and found out that some of the neighbors were awful! I had slobs next door and had to look at junk, a slew of adopted kids accross the street that ran wild (most ended up into drugs and gangs in Lansing), and also a drunk mom down the street. But we stuck through it all because we love our house and was not going to be forced out. These people eventually sold their houses or forclosed and moved on. Now our neighborhood is the cutest, necest and very peacefull! My kids grew up very well and recognized those kids for what they are and never became close friends. Just because they live in the same area does not mean they have to be friends.
Forclosure and bankruptcy are both very hard on your credit and your lives for a very long time. Not to mention that ethically, people shouldn't walk away from their debt just because they want to move. We're in a serious situation here all over the country and we need to stand up together and get through it.
M.M. answers from Lansing on April 27, 2009
Do you really want to ruin your credit because you do not like your neighborhood? Your credit will be wrecked for at least 10 yrs. I know that a lot of people are in the same boat including myself. I would love to move but I owe to much on my home. I would say stick it out. Teach your children some values. Send your kids to a private school or a different school than in your neighborhood. We need to teach our children that our words mean something and when we commit to something you do not just throw in the towel that we stick it out no matter what...
That what my family is doing just waiting... Most of the option out there are for people behind on there mtg. and can't pay. I do not know of any personally for people who can pay and are not behind...
H.F. answers from Detroit on April 27, 2009
When hard times hit the economy...BUNKERDOWN! Feel blessed that you are even in a home with your husband and your children! If your husband is willing to tough it out, you as his "help-mate" should be standing at his side. Do not consider withholding payment for a year, this is a terrible idea. THINGS GO WRONG with ill-planned strategies. Sickness, emergencies would eat up your "saved payments" before you know it and you'll find yourself without a home and without a recovery plan! Wake up each morning with a positive attitude and LOOK for the good things about your neighborhood and don't dwell on the bad. Your boys will thrive no matter where they are as long as they can look to you and their Father for possitive input and strength to get through whatever lies ahead. You'll pull through your negative times and be the happier for not ruining your credit or risking your HOME. Work on making your HOME even more your HOME. Best wishes.
K.G. answers from Detroit on April 26, 2009
This is just my opinion but I think that you would be crazy to foreclose on your house!
I fully understand your concerns about the influance that your neighbors have on your children but the most important thing is to instill your family values. You can still do that with bad neighbors.
Have you thought about putting the house up for sale and just seeing what happens?
K.V. answers from Grand Rapids on April 27, 2009
Maybe rent out your house to cover that mortgage and then look for another one? I wouldn't foreclose. Won't that make it hard for your kids to get loans for college?
D.E. answers from Detroit on April 27, 2009
Hi N., I am in somewhat of the same situation, we have 2 issues, one our neighborhood is going down hill and we have outgrown our house. We spoke with a realtor and the news from her was not good either about selling our house. My husband and I sat down and discussed all of our options get a new house and let the current house go, rent the house, or just wait it out. We consulted with the realtor as well and she said waiting it out is probably the best option for us, because in the long run you really do not want a foreclosure on your credit, I mean you worked hard to get and keep the house why throw all that hard work away. If your concerned about the schools find a school in another district, most of them participate in the school of choice program. we opted to send our son out of district as well to school. I am the one who hangs out with my kids I don't allow alot of interaction with the neighborhood kids, tho my children are both fairly young 4 & 19 mos. I think in the long run letting your house go would haunt you later. I agree with the woman who said that there are people right now losing their homes because they can't afford to pay for them that is not the case here and you don't want to teach your children to just give up because you can.
L.J. answers from Detroit on April 27, 2009
i can understand that if the neighborhood is getting bad that is one reason to move, but i think too many people are "giving up" on their houses and foreclosing for wrong reasons. it actually makes me upset that my husband and i barley make it every month but our bills are paid on time, we always joke we should let everything go like everyone else but that just isn't what we think is right.
the house behind us sold for 170,000 while the house acrossed from us is for sale for 107,000. so there are people who would buy a house more expensive if it means there isn't any improvments that need to be done.
good luck either way
D.P. answers from Detroit on April 29, 2009
I understand you dilemma. However, you will be so disappointed if you think that affluence will automatically equate to better breeding. My sister & BIL's neighborhood is a testament to this. The only difference is that you don't here things as much because of the size of the homes and the distance between then.
True, we as parents should be able to influence our children into behaving the right way regardless of what he/she is faced with. That said, exposure does tend to influence us humans somehow. There is no cookie cutter map that we can pave our children's future with. Some kids would rise above it all and others will succumb to the influence. That is the challenge of parenting.
Ultimately, this is something you and your husband have to agree on. Your credit score may be ruined and your paychecks may be garnished and your neighbors in your "better" neighborhood may not even be "better". Still, that is your choice to make.