What to do after a short sale

[sd gal]

I had a short sale 2 years ago and I was told that the new law allows people with short sale/ foreclosure to be able to apply for a morgage loan after 2 years, not 3 years anymore. So I tried but rejected… I was told to wait until 7 year mark! is there anyway I can get a morgage somewhere to buy again?
I have about $110k sitting in bank, but not quite enough to buy anything in housing market…. personal loan is like 12% interest rate… totally stuck living in apartment…..
BTW, I just need 100k-150k loan.

[spdrun]

Portfolio lenders/credit unions that keep the loans on their books and may be more flexible with underwriting standards.

Other option is seller financing, doesn’t hurt to ask if you can put 40-50% cash down and it’s an equity or estate sale.

[Coronita]

“What to do after a short sale”

1. Uh….. rent….

or

2. Save more money for 50+% down…..

or

3. Vote for Obama. He’ll make sure you get credit and you can probably short sell again if you need to…

[spdrun]

Snarkasm aside…

Actually, voting for Romney might be better. Less “consumer financial protection” nonsense, and he supports quick foreclosures and kicking the bums out.

i.e. a bank would be happy to lend at say prime +2% to less qualified people if they know they can foreclose within 6 months if payments aren’t made.

[Coronita]

To the OP (sd gal)..

I’m going to be an ass and tell you… in bold caps…

YOU ARE NOT IN A POSITION TO BUY.

Sorry, $110k sitting in the bank is NOTHING, especially if you are 30ish (give or take a few years).. If you run into something unforseen, you’re going to need that emergency cash. $110k isn’t going to go very far for you if you’re out an extended period of time in SoCal. You need to save up/invest-up wisely, build your net worth over the next few years…Because as you say, “you can’t afford to buy anything here.”

Why are you trying get around a system telling you that very message?..There’s a reason why banks are hesistent to lend to you right now, and there’s a reason if you get a personal loan is like 12%…They think you’re a risk. So they want to charge you a hell of lot to take on that risk. It ain’t worth it for you….

The thing about “totally stuck living in an apartment”, while I can sympathsize with that situation, it’s really not *that* bad…And reality is “buying a home” is a nice to have..

Rent, build your net worth right now…There’s nothing wrong with it. And frankly, it’s probably much better for financial health right now than anything else.

You’re not necessarily missing out screaming deals right now anyway.

It actually might work out better for you if you did wait a few years.

[Coronita]

[quote=spdrun]Snarkasm aside…

Actually, voting for Romney might be better. Less “consumer financial protection” nonsense, and he supports quick foreclosures and kicking the bums out.

i.e. a bank would be happy to lend at say prime +2% to less qualified people if they know they can foreclose within 6 months if payments aren’t made.[/quote]

That’s a crappy thing to do to people, although it’s not like people are held at gunpoint to take out ridiculous loans.

You know it’s just funny that sub-prime loans are back… GM/Ford/Chrysler sales numbers all look great…Because a good portion of new car sales are all subprime again…And those people are going to get screwed again in a few years ago…..We (americans) never learn..

[spdrun]

Or buy something inland or in Phoenix for cash, keep it rented out, and use it to pay for your rent. Once it’s income-producing, you may be able to mortgage it to about 60% of value, pulling cash out.

$110k cash is actually a decent chunk of change for an individual, considering that AVERAGE net worth in the US is something like $80k for a family. Meaning more like $40k or less per individual. A lot of that “average worth” is also in illiquid real estate.

[spdrun]

Why are foreclosures a “crappy” thing to do? They’re a NECESSARY thing, and in fact make it easier for banks to lend.

Banks need to be able to easily enforce the terms of their loans if they’re able to give loans. The reason that sub-prime loans for cars are still popular is that they’re easily and quickly enforceable.

[Coronita]

[quote=spdrun]Why are foreclosures a “crappy” thing to do? They’re a NECESSARY thing, and in fact make it easier for banks to lend.

Banks need to be able to easily enforce the terms of their loans if they’re able to give loans. The reason that sub-prime loans for cars are still popular is that they’re easily and quickly enforceable.[/quote]

What’s crappy thing to do is extending loans to people knowing that it will reak havoc on their finances. The purpose of the past few years was to tighten lending standards (a) so we won’t have another banking/corp/housing fiasco (b) so common individuals won’t get screwed (again), since as most americans demonstrate over and over and over again, that give them a long leash, they will hang themselves financially… by borrowing more than they are able to handle, with no backup plan, no margin of error…So long as the minimum payments can be met….

In as much as I hate obamanator trying to turn banks into a scapegoat and excuse individuals from personal responsibility, I’m not a proponent of the other extreme of aforementioned Romney in which banks/financial institions lending to people beyond their means knowing very well it will screw them. In other words, I don’t think some people that got screwed with the housing bust #1 have really learned to avoid financial ruin #2 that is a very distinct possibility in the next few years, especially IF Romney and crew do get their way and screw the everyone from the upper middle class downward.

[bearishgurl]

I’m just curious how sd gal obtained $110K in two years since her SS yet she managed to stiff her lender by how much at closing?

Was she able to save up a good portion of this money while squatting?

If so, was she working all during her default and subsequent SS and thus it was a “strategic” SS?

And how did she get into this SS debacle in the first place? Was it due to “cashing out” her home “equity” and then deciding to stiff the lender when it came time to pay some or all of it back?

As you may surmise here, I have no sympathy for short sellers. I haven’t heard of ANYBODY being able to get a mortgage even three years after a SS! Perhaps other Piggs have but I question whether their recent purchase-money mtg was actually at a “competitive” rate with “competitive” terms and reasonable closing costs. A SS is technically the same as a foreclosure as far as FICO is concerned. Short sellers and foreclosure “victims” can’t have it both ways. Their debt (often massive) was “forgiven” and so now they’re going to be “damaged goods” for awhile and have to rent.

This is only fair to all those homeowners who lived within their means for the last decade-plus and played by the rules.

[spdrun]

flu —

Simple solution to this would be to treat ALL mortgages like commercial mortgages. If PITI isn’t below 75-80% of the market rent for the property, then the loan won’t be made.

This would give people a “walk away by renting it out, and go rent something cheaper” option.

[SD Realtor]

My personal advice would be to not buy. However if you decide to, you can probably find lenders that will loan to you.

If you have a pulse and can prove income or have enough phony documentation to fool an underwriter then our the FHA will gladly backstop your loan with taxpayer money.

Call a lender and tell them your story.

[no_such_reality]

[quote=bearishgurl]I’m just curious how sd gal obtained $110K in two years since her SS yet she managed to stiff her lender by how much at closing?
[/quote]

Kudos to her. She was either smart enough not to impoverish herself with a bad loan or she can save enough that she’s piled $100K in a couple years.

Frankly, more people should play hardball with the banks and force them to foreclose. The loans are bad for them, the borrower. The borrowers never should have taken those loans and the banks never should have made them.

You should repay the loans you take, but frankly, the loans border on unconscionable. The refi’s to ‘save’ them are even more unconscionable taking a far greater share of their income to maintain than equivalent housing will cost them.

Debt is evil. In can be used smartly but borrowing money should never be easy because debt enslaves you.

[Coronita]

[quote=bearishgurl]I’m just curious how sd gal obtained $110K in two years since her SS yet she managed to stiff her lender by how much at closing?
[/quote]

BG, I’m not one to judge or question how/when the savings came from.

In fact, I think the OP should be commended for saving $110k to begin with, as many people don’t do this to begin with.

But, all he/she had to say was personal loan at 12%, and that was a red flag to me..

You see, contrary to me being an ass most of the time, I don’t like seeing individuals getting screwed. (well, I make exceptions to people like *cough* my neighbor who goes through a short sales process and still spending whatever money on Nordstrom crap they are suppose to be saving to get back on their feet….But that’s a separate discussion)…And it’s my opinion (and just my opinion) that the OP isn’t not ready to buy..Similar because he/she needs to shore up his/her financial resources (right after dodging a bullet).

and frankly, I really don’t think she’s missing much. There’s a bunch of people trying to buy, trying to scramble..And pricing isn’t all that hot right now. Supply isn’t that great, and a bunch of other issues. If the OP actually waits just 3-4 years, guards her money like a hawk, makes it grow a bit, he/she is going to be in such a stronger position than she is right now. yes, interest rate is low right now.. But I doubt she can take advantage of this right now anyway. That’s was my point.

I can understand that sometimes when one rents, it’s frustrating and annoying..But at the same time, it ain’t worth screwing up one’s future over yet again another “nice to have” imho.

[no_such_reality]

[quote=flu] If the OP actually waits just 3-4 years, guards her money like a hawk, makes it grow a bit, he/she is going to be in such a stronger position than she is right now. That’s was my point.[/quote]

ROFL, in 4 years you’ll be wishing for the good ol’days of today.

The USA’s Greek tragedy is just beginning. We’re damned if we do and we’re double damned if we don’t. And nobody getting elected this year is going to have the nads to do anything other than spout party doctrine.

[Author]

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