Complicated Situation - What to do?

[Craigh95630]

Hopefully someone on here will be able to shed a little light on a complicated situation in today's every changing real estate climate here in California. Here's the situ:

My wife bought a new home in 2005 before we were married entirely in her name. At the time she made close to a six figure income and easily managed to get a nothing down 30-year fixed mortgage. Since then, she has switched jobs, and now makes barely a third of what she made before. Between the two of us right now, we barely squeak by with monthly bills on our income alone. Of course since we bought, our home value has dropped more than half, and what was a new suburb in 2005, is now quickly turning into an undesirable neighborhood with gang activity at the local park, etc. Any payments we make now is like throwing money away the way we look at it. We are looking for the exit.

Last month, both my wife and I recieved a sizable inheritance from a family member which we do not want to see invested in our current property, but rather would like to invest in a new home which we see ourselves staying in for some time to come. We are looking into the possiblity that I could obtain a mortgage to purchase another property in my name, and then once completed, pursue our options on the existing house with renegotiated loan terms to get the payment down enough to make a feasible rental property, attempt a short-sale, or let it foreclose and move on. From what I understand, lenders are getting wise to this sort of thing and might be looking to hold me to my wife's mortgage payment even though I have no ties to it besides our marriage.

Not sure if we can get something like this to work. If not we will be unable to get the bank to currently renegotiate the mortgage terms to lower the payment or do a short sale to get out of it because of the recent inheritence. Maybe we sit in it until it gets foreclosed on and go rent for a couple of years until we can buy again? So many questions. #1 thing though is protecting our savings/inheritence from getting dumped into our current property because we know will never get it back again.

[HomeGuru]

Originally Posted by Craigh95630

Hopefully someone on here will be able to shed a little light on a complicated situation in today's every changing real estate climate here in California. Here's the situ:

My wife bought a new home in 2005 before we were married entirely in her name. At the time she made close to a six figure income and easily managed to get a nothing down 30-year fixed mortgage. Since then, she has switched jobs, and now makes barely a third of what she made before. Between the two of us right now, we barely squeak by with monthly bills on our income alone. Of course since we bought, our home value has dropped more than half, and what was a new suburb in 2005, is now quickly turning into an undesirable neighborhood with gang activity at the local park, etc. Any payments we make now is like throwing money away the way we look at it. We are looking for the exit.

Last month, both my wife and I recieved a sizable inheritance from a family member which we do not want to see invested in our current property, but rather would like to invest in a new home which we see ourselves staying in for some time to come. We are looking into the possiblity that I could obtain a mortgage to purchase another property in my name, and then once completed, pursue our options on the existing house with renegotiated loan terms to get the payment down enough to make a feasible rental property, attempt a short-sale, or let it foreclose and move on. From what I understand, lenders are getting wise to this sort of thing and might be looking to hold me to my wife's mortgage payment even though I have no ties to it besides our marriage.

Not sure if we can get something like this to work. If not we will be unable to get the bank to currently renegotiate the mortgage terms to lower the payment or do a short sale to get out of it because of the recent inheritence. Maybe we sit in it until it gets foreclosed on and go rent for a couple of years until we can buy again? So many questions. #1 thing though is protecting our savings/inheritence from getting dumped into our current property because we know will never get it back again.

**A: use the inheritance money to pay the mortgage.

[Craigh95630]

Originally Posted by HomeGuru

**A: use the inheritance money to pay the mortgage.

Not acceptable. One of the things asked of us when receiving the inheritance was not to waste it on paying bills but rather invest in something for the future. When my wife lost her job and had several months unemployed before finding a new job which paid for less, we ended up dipping into a $15k savings pot to help make monthly payments. She should have never bought the house in the first place but it is too late for that now. What we are looking towards is our future and raising our children in a safe neighborhood with good schools. Our neighborhood is none of these things since our local law enforcement has been cut and gangs are taking over the neighborhood (gang murder in the neighborhood just last weekend). We are looking to sit in our house and pool every mortgage payment with our savings until they foreclose on us. We can rent for a couple of years and then I'll go get a house in my name.

[LindaP777]

Originally Posted by Craigh95630

One of the things asked of us when receiving the inheritance was not to waste it on paying bills but rather invest in something for the future.

Buying real estate, even as a rental property is investing in your future.
(FYI - most of the members on here aren't keen on helping people do something shady, which kinda sounds like the dirrection you were going.)

[Andy0192]

So you were really hoping someone would give you legal advice on how to side-step your wife's obligations?

Sounds as if your mind is made up already for what you want to do.

[Craigh95630]

Shady? Side-step my wife's obligations? Maybe.

The way I look at it, she made a big mistake when she bought in 2005. As did a lot of other people. But we have both always made good on our loan agreements, are never late on payments, we play by the rules. But when we see the current situation in today's economy and housing market, and are watching people who made poor decisions get bailed out right along with the mortgage companies and banks whose poor business practices got us here in the first place, I no longer feel like playing by the rules for the sake of helping those who didn't. My only concern now is what I can do to ensure my wife and our family will have a strong future. I can't do that while sitting and overpaying for a property which will take 10-15 more years before it has any equity. If that means her taking the forclosure hit to her credit record so we can move on to have safe place to raise a family, so be it. It is a risk she is willing to take.

Sorry to be blunt and to rant, but I don't trust the system anymore and do not believe it is watching out for my best interests. Our mortgage keeps getting shipped around from bank to bank, and each one tries to increase the monthly payment with their own tricks. Thank you for the responses but we know now what we need to do.

[VeronicaLodge]

look she borrowed money and promised to pay it back, just because the asset attached to the money borrowed has lost value and because she took a cut in pay, should not mean that the person/entity that loaned her the money should just suck it up and take the loss. why should they?

sell the house and use the inheritance to pay any amount still owed once sold, then use whatever is left to pay for or put down a down payment on a more desirable house in a better area. thats the only advice i have.

[Craigh95630]

If we sold now for what the houses in our neighborhood are going for, we'd still be $130k in the hole, which is more than savings and inheritence will cover.

[VeronicaLodge]

then i guess you stay put and pay your bills.

[HomeGuru]

Originally Posted by Craigh95630

If we sold now for what the houses in our neighborhood are going for, we'd still be $130k in the hole, which is more than savings and inheritence will cover.

**A: I suggest you have your wife READ the mortgage and note.
Note: read especially the default and foreclosure provisions.