When would you qualify for another house after Bk and/or Foreclosure?
Despite how much we try to understand this market and how banks are handling their affairs….. What do you tell a client in this situation?
Client: Husband has been downsized 3 times. Used all of $30,000 from 401k to make it this far. Filed Chapter 7 in 2005 and kept the house out. (Except for the 2nd) Currently is making $7.70 an hour, but has employment and off unemployment which would have been more than current job, but thought it would be better to find another job which pays more if working. Wife ~ Self employed, but finding other jobs to “make do” from pay check to paycheck. Self employed wages are more than part time/full time jobs, but far and few between.
Currently forbearance is up at the end of August and the Home Affordability Program only works if you have the income. The bank recommends Short Sale.
Current lender will not modify loan due to lack of income. Owes $158,000 on first and $35,000 on second (they still are on title even though they were in BK) Home is not worth both 1st and 2nd.
Not to mention the “other debt” …. Eating, medical, utilities ….
If they do a short sale, they still will need a place to live.
The banks say they don’t want the house back, but will not extend the forbearance agreement to help.
If they do a short sale, what are their options for getting a rental or financing in the future? They have to move and do not have money for down payment or rent! (Rent is about what the house payment is)
If they do a Foreclosure, what are their options for getting financing in the future?
Not advising this, but wouldn’t they have 6 months or longer if they take this route? Then they could save some money for a down payment and in 6 months have a better chance to have more income?
What would you advise?
Should they file BK again and Short Sale the house?
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