How Do We Get Rid of a House That Is Underwater $ ?

I'm not sure what Michigan law is so you will need to check with your state to be sure. Some states if you foreclose they can not come after you for the deficiency, some can and you are on the hook whether you foreclose (walk away), do a deed in lieu of (hand the keys over to the mortgager), or do a short sale (attempt to sell it for less than you owe to which is considered a settlement with the lender). No matter which way you go you won't be able to buy another house for 3 to 5 years from the date of the loss. The timeframe depends on the reasons (if they determine they were justified or not). If you can afford it and can't prove financial hardship then you will probably have to wait 5 years unless you can find a private invester, someone not FNMA/FHA backed. If you have 2 mortgages and the first can't come after you for the loss but the 2nd can then you're only way out financially is a bankruptcy. No matter which type of loss (foreclosure, deed in lieu of, or short sale settlement) each trade or loan will impact your score the same and stay on your credit for 7 yrs from the date of the last payment. You have better chances down the road if you only have a mortgage hit on your credit. Your score will bounce back quicker if everything else stays current. A BK will stay on your credit as a public record for 10 years and all the trades/loan on your credit that are part of the BK will have a severe derog while they stay on your credit for 7 yrs.

What does it cost to rent in the better neighborhood since you won't be able to buy? If its the same as your house then is it really cost/credit effective to damage your credit?

Being suckered into the 80/15 loan in 2004 is no reason for denial. Who is your lender? Did you provide all the documents necessary? What are your current mortgage payments vs. income? If its below the government criteria then you wouldn't qualify no matter what.

You can also contact the HOPE hotline toll free at 888-995-HOPE (888-995-4673) or online at http://www.995hope.org/. They should be able to help with the denial of the modification and possibly answer credit liability questions for your state.

I'm sure this wasn't the answer you were hoping for. If the cost of renting is the same as your mortgage, then if you stay and make it work for a few more years you should be able to get your money back. Although I'm not sure if your current house has enough room for 3 kids. Maybe reorganize and declutter and repurpose some areas in the house? I've been watching to much Clean House lately. =) Good luck.

Updated

I'm not sure what Michigan law is so you will need to check with your state to be sure. Some states if you foreclose they can not come after you for the deficiency, some can and you are on the hook whether you foreclose (walk away), do a deed in lieu of (hand the keys over to the mortgager), or do a short sale (attempt to sell it for less than you owe to which is considered a settlement with the lender). No matter which way you go you won't be able to buy another house for 3 to 5 years from the date of the loss. The timeframe depends on the reasons (if they determine they were justified or not). If you can afford it and can't prove financial hardship then you will probably have to wait 5 years unless you can find a private invester, someone not FNMA/FHA backed. If you have 2 mortgages and the first can't come after you for the loss but the 2nd can then you're only way out financially is a bankruptcy. No matter which type of loss (foreclosure, deed in lieu of, or short sale settlement) each trade or loan will impact your score the same and stay on your credit for 7 yrs from the date of the last payment. You have better chances down the road if you only have a mortgage hit on your credit. Your score will bounce back quicker if everything else stays current. A BK will stay on your credit as a public record for 10 years and all the trades/loan on your credit that are part of the BK will have a severe derog while they stay on your credit for 7 yrs.

What does it cost to rent in the better neighborhood since you won't be able to buy? If its the same as your house then is it really cost/credit effective to damage your credit?

Being suckered into the 80/15 loan in 2004 is no reason for denial. Who is your lender? Did you provide all the documents necessary? What are your current mortgage payments vs. income? If its below the government criteria then you wouldn't qualify no matter what.

You can also contact the HOPE hotline toll free at 888-995-HOPE (888-995-4673) or online at http://www.995hope.org/. They should be able to help with the denial of the modification and possibly answer credit liability questions for your state.

I'm sure this wasn't the answer you were hoping for. If the cost of renting is the same as your mortgage, then if you stay and make it work for a few more years you should be able to get your money back. Although I'm not sure if your current house has enough room for 3 kids. Maybe reorganize and declutter and repurpose some areas in the house? I've been watching to much Clean House lately. =) Good luck.

Hi A.,

We were in a similiar position. We had two children with a third on the way living in a two bedroom, one story condo. We had no where to put the baby so we ended up doing a short sale. Jamie Matt is a real estate agent that worked with us. She is AWESOME! I cannot say enough about her. She works very closely with a real estate attorney who you are able to talk with too. If you want her number or would like more information on how our short sale worked out just let me know. We are now living in a new house which we were able to purchase.

A.

Hmm,,, could you possibly do a shortsell, i no it lowers ur credit score but heard its not that much, We also did the same load our mortgage had went up to about 1900 and now they have us down to 1200 intil they decide if we are approved for the mortgage refinance thing. Which probley are not, and the area is going downhill quick, thankfully i love my daughters elem school but im hoping to find a way out of the area soon our selfs. is renting an option i no renting a house for 1700 might be hard in this area though!

Would it be possible to rent your current place out for $1900. a month? Or somewhere close to what the mortgage is?

Even though you were turned down for the mortgage reduction, you could still contact the Hope Now group and see if they can give you any financial guidance.