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sachamay
Posts: 2
Registered: ‎02-14-2011
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How to move up when your house lost all equity...

We lost all equity in our current home.  Our mortgage is underwater for almost $40,000.... We would like to move to a nicer and bigger house.  Is there any way that we can make this happen without losing all our savings just to get rid of the house that we now own, but don't like anymore....  By the way, we have lived in this house for 7 years and we are current in our mortgage payments.

 

Thanks!

 

:smileytongue:

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sheriff
Posts: 2,320
Registered: ‎06-01-2012
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Re: How to move up when your house lost all equity...

Buy a new house first.  Tell the mortgage company you are going to rent out your current house.  Do you have enough for a downpayment?  Or do what people with no ethical standards do and stop paying the mortgage until they foreclose.

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DISGUSTED1
Posts: 72
Registered: ‎07-17-2011
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Re: How to move up when your house lost all equity...

"Or do what people with no ethical standards do" LMAO.. LIke the banks that are stealing people homes ? I would read up on Securitization fraud, Robo signing and check your current documents on the Recorder of Deeds website. Chances are the banks ( Who ONLY SERVICE YOUR LOAN and typically DO NOT OWN your loan) have royally screwed up on your closing documents. ( There are laws in place that need to be followed) yet the banks think they are immune to following THE LAW.

 

It still amazes me people in foreclosure let servicing banks try to foreclose in THEIR NAME.. The don't own the note..

 

If you need further info send me an IM

 

"Tell the mortgage company you are going to rent out your current house"

 

So what happens if the renter stops paying ? You have 2 nuts to pay and a very short paddle up the river.. I would straighten out the first home first.

 

 

Redfin Preferred Lender
Erik_Johansson
Posts: 145
Registered: ‎03-03-2009
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Re: How to move up when your house lost all equity...

sachamay,

 

Your situation is not unique and there are options. Contact a Loan Officer and run a pre-approval. They will be able to take a comprehensive look at your circumstances and let you know if you have the capacity to purchase a new home assuming you retain ownership of your current home.

 

If you want to buy now:

 

Your current home will be considered "the departing residence" and if you have less than 30% equity the lender will consider the full payment (Mortgage, Property taxes, Insurance, and if applicable Association dues and PMI) as another liability when calculating your "Debt to Income" (DTI) ratio. Depending on your circumstances this may or may impact your ability to purchase a new home.

 

If you want to buy later:

 

Consider renting or moving in with family for the next 6-12 months. If you move out and then put a renter in the home it becomes an "investment property" which is treated differently than a "departing residence". You may be eligible to use up to 75% of the lease to offset the payment and that in turn impacts your Debt to Income ratio which impacts the price point for the new homes.  Why 6-12 months? Products and programs vary depending on the circumstances and details don't fit neatly into a forum post. Plan for 12 months to be on the safe side.

 

The bottom line:

 

Take some time to pre-approve you will get a much clearer idea of how your individual circumstances impact the overall process and that will allow you to decide if it is better to pursue a now home now or later.

 

Hope this help,

 

 

Erik Johansson | Redfin Preferred Lender
See all my reviews
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sheriff
Posts: 2,320
Registered: ‎06-01-2012
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Re: How to move up when your house lost all equity...

[ Edited ]

DISGUSTED1 wrote:

"Or do what people with no ethical standards do" LMAO.. LIke the banks that are stealing people homes ? I would read up on Securitization fraud, Robo signing and check your current documents on the Recorder of Deeds website. Chances are the banks ( Who ONLY SERVICE YOUR LOAN and typically DO NOT OWN your loan) have royally screwed up on your closing documents. ( There are laws in place that need to be followed) yet the banks think they are immune to following THE LAW.

 

It still amazes me people in foreclosure let servicing banks try to foreclose in THEIR NAME.. The don't own the note..

 

If you need further info send me an IM

 

"Tell the mortgage company you are going to rent out your current house"

 

So what happens if the renter stops paying ? You have 2 nuts to pay and a very short paddle up the river.. I would straighten out the first home first.

 

 


There is a difference between people who can't pay their mortgage, due to job loss or extenuating circumstances, and those that choose not to, even though they can make they payments.  I have seen real estate agents who have negative equity and decide to buy a different home buy a new home and then strip the current home bare and let the bank have it.  That's what I call "no ethical standards".  Banks behavior is a totally different question.  If you act like they do you are no better than them.  If you took out a loan you knew you could not afford I have no pity for you.  I also have no pity for the bank that made a loan to a customer they knew could not afford the payments

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DISGUSTED1
Posts: 72
Registered: ‎07-17-2011
0

Re: How to move up when your house lost all equity...

I agree Sheriff..  If you simply have no way of paying or knew you where in over your head " Its time to cut your losses" I never hear much chatter about those that put 20% down and tried for years to get a MOD from the bank. At first we would have been happy with just a CURRENT Interest rate reduction ( Denied Denied). Then you sit back and watch prices plummet yearly around here ( Paid 225K Current sales 95K-115K)  THAT IS A FLIPPING EYE OPENER..

 

Then you start digging a little deeper. Mortgage Fraud on a property you put your life savings into with no help in sight. Robo signed Documents,fictitious notary stamp Docs, Mortgage supposedly put in a MBS Trust only to find out A) They missed the cutoff date or B) The Trust is CLOSED... All the while these banks have/are still collecting servicing fees on these loans and more than likely have already been paid off ( Tarp, CDS Insurance) on these loans they are trying to go after. It's a shame.

 

Yes walk away if you cannot afford the property anymore but I would seriously look for security fraud on ALL your closing documents first.

 

I actually have the original promissory endorsed in BLANK and a copy the bank sent RUBBER STAMPED as the endorsement.. Good times...