Should we forclose on our house?

Hey, I'm not sure if anyone alse has had any experience with a forclosure, but I'm thinking we may have to turn our house over to the bank.

Here's the deal... 3 years ago we bought a small 3 bedroom house in Ohio, and for the past 3 years we've done thousands of hours of work on it and spent about $8,000 on it too.

The house has been on the market for a few months and we've had no intrest at all. We've got the price down to a point where even if we get our asking price we'll still loose about $3000, and no one ever pays asking price.

I'm already SO FUCKING PISSED about the work that we'll never see the benifits from, but now it seems that we may actually have to lower the price again to a point where when we sell, we'll still have a year of more of house payments to pay.

So I guess we have to decide if we are willing to pay house payments on a house we don't even own anymore, or ruin our presious credit.

This experience has so soured me on owning a home I think I'll never do it again.

Conventional wisdom says its always better to buy than to rent, I'm here to say it ain't nessesarily so.

Has anyone ever foreclosed on a house? What are the consiquences? Anyone?

 

I don't have any personal experience with it, but I prepared someone's taxes this year who foreclosed their house. They ended up owing more money on the loan than the house was worth. A lot more. When the bank took it, the home owner showed about a $40,000 gain because that is the amount they didn't have to pay that was more than the house's worth. He had to show that gain as INCOME on his tax return. Also, your credit will go down, but if you aren't planning to buy another house or car soon or get a credit card, that wouldn't bother you.

 

unfortunately you are not the only person this will happen to. the government and the banks make money by encouraging people to borrow money on things they can't afford. when you buy a house you pay taxes to the government and interest to the bank - how could they make money from you if you never did this.

in australia there has been a "boom" created by people rushing out and buying tiny appartments for 500, 000 dollars. the market is not self sustaining it is a legitimate pyramid scheme that favours only those with money who got in first bought low and sold high before the scheme collapses. count yourself lucky you'll only spend a year of your life paying for something you never got other people struggle on much longer and end up killing themselves or someone else.

renting is ok provided that you can rent with someone you know and trust. flatmates who have appeared at your doorstep are no more than a trojan horse. if you have to go looking for a place to share this is another problem - i have never shared with people who have not ripped me off in some way. if you have to go looking for a place to share you are always in the disadvantge. you will be wise rent alone or with partners / relatives who can be trusted.

maybe you should look around and see if there are anykinds of co-op communtiy that respects the sanctity of personal space. i have looked for this in australia but they do not exist, its all about smoking/ selling weed, not washing and wearing beads and occasionally ripping people off in your own "community". oh yeah or they have some crazy doctrine or idea that doesn't fit into reality.

 

TALK TO A LAWER.

If the bank forcloses, they will auction the house. It may be that if that does not bring in the value of the note, you will still owe the balance. A lawer would know. The price of a lawer is small in comparison with the money involved.

 

Alot of banks also tend to advertise the forclosed properties very privately so partners can benefit from your loss. HAve you looked into renting it out, sell on owner contract, can you afford the payments, there is also a thing where an investor takes over the loan and rents it back to you, be creative.

 

as a last possibility i'd see if you can rent out a room. warning as before housemates can be a triojan horse. any money gained might help stabilise your mortgage repayments. it might even things out so that the repayments equal what you'd pay in rent-hence saving all the stress of moving. even if this helps you do this i'd see this situation in the light that at some point interest rates will rise again and totally wipe you out.

 

if your credit has not washed out yet see if you can refinance to lower fixed rate, yes roomates can be a pill bt we are talking about saving your home and credit, see if there are any grants in your area or tax breaks for i.e. making home handicap acces, or make it housing authority approved to rent out to fixed income, some states pay you real well for that but again not without possible issues, good insurance and convient fire, lol! That is a joke, dont do it, just kidding!

 

http://www.thecreativeinvestor.com/residential/

That is the best website I've found dealing with real estate, these are fourms to talk to the pros about your problem... theres even people here that might want to buy your home! these guys are all creative real estate investors, they are very helpful and I'm hooked on this site.. have fun in the fourms....



Mike...

 

sounds like you were trying to "flip" the house and messed up..if that is indeed the case the greed got ya...if that is not the case there are always alternatives to foreclosure the trick is finding the one the one that will work in your situation

 

WE WERE DEFINATLY NOT TRYING TO "FLIP" THE GOD DAMN HOUSE!

I ain't no wheeler dealer. I got fucked for buying a beat up house, then working my ass off on it for three years. We completely revived the house, and we only wanted to break even or maybe make a grand. Instead we'll loose thousands.

Its a lesson learned. We won't have to forclose, we've rebudgeted and we're just going to have to pay a rent and a mortgage until the thing sells.

I'm not going to buy anything bigger than a car for a looooooooooooong time to come. I may never buy another house. Renting is the best way.

I've never been so "under the thumb" of capitalism as I am right now and I HATE it!

 

So what happend?