Is getting a mortgage loan possible? Come see my situation

[cali girl]

Hello everyone,

So we filed Chapt 7 in 06, it was discharged in Jun 2007. When we filed, we let our home go and it was sent to the bank.

We live in Stockton, CA, the capital of foreclosed homes. This is enticing to us now, because there is a CANDY SHOP of homes that are going for little or nothing!

So we figured that we are paying $1600 in rent now, and if we bought a home at $200-240K, we could potentially continue to pay about $1600 a month in rent. Originally, we had a loan for $310K with bad credit and we were paying about $2300 per month.

So, here's the scoop. We aren't yet 1 year into our discharge. Is it realistic to think we may luck up on a loan? We don't have anything to put down, either. We would need 100% funding.

I wasn't able to check my husband's scores, but mine are at about 532, 556 and 630 as of today.

I searched through this forum and saw all this hype about NLMC... can someone send me a link to their website? I saw a few online but want to make sure that I have the right one. Any other options?

I think I've given all the information I have as to our situation. Is there any hope?

[Minnymouth]

Most mortgage companies/finance companies will not "touch" you right out of bankruptcy until your at least 2-3 years out of discharge. Starting around the 2 year's out is when the interest rates are reasonable again.

You will need a good payment history for the next 2 years and I would consider getting a downpayment together.

[cali girl]

Most mortgage companies/finance companies will not "touch" you right out of bankruptcy until your at least 2-3 years out of discharge. Starting around the 2 year's out is when the interest rates are reasonable again.

You will need a good payment history for the next 2 years and I would consider getting a downpayment together.

Thanks, Minny... I hope the housing is still in a slump by then. LOL

[I want out]

What makes you think Stockton is anywhere near a bottom yet?

You should thank your lucky stars you're not able to buy yet.

[cali girl]

What makes you think Stockton is anywhere near a bottom yet?

You should thank your lucky stars you're not able to buy yet.

Whattya mean? You think it will go even lower? Well, let's hope so.

I would love to be able to buy for little or nothing one day. I now wish I would have waited 3 years to purchase my home today instead of in 2005, and I wouldn't be on this forum right now talking about my past foreclosure and bankruptcy!

[I want out]

Give me 3 good reasons why that market has already turned around.



Folks in the real estate business have a funny way of turning everything into evidence that it's a great time to buy.

Just because the people who have a vested interest in your purchase doesn't mean that it's a good deal, or the right time.

Ah well, I'm a firm believer that things work out for the best in the end.

[cali girl]

Give me 3 good reasons why that market has already turned around.



Folks in the real estate business have a funny way of turning everything into evidence that it's a great time to buy.

Just because the people who have a vested interest in your purchase doesn't mean that it's a good deal, or the right time.

Ah well, I'm a firm believer that things work out for the best in the end.

This is actually my own personal opinion. The fact that almost every 3rd house on every street in Stockton is selling for $175K - $250K, versus $400K that it once was, tells ME that it's a great time to buy.

We aren't buying just to have to sell later, so the market going 'back up' is not in our interest. We just want a house that's OURS, that we can afford and that we'll be in for years and possibly give to the kids later.

So for me, it's a great time to buy. Unless I am missing something. I'd rather buy now while the prices are low then wait til the market goes back up and have to pay 3 and 4 hundred thousand dollars. At least with a $150-250K mortgage, I won't be worried if something happens to us financially. We would be able to skate by with just one income on that kind of mortgage.

[JeepMom]

Yes, it is possible. We got a home loan 8 months past discharge. We just hit out 2 year mark and refi'd for a better rate.

The first rate was 10.3% 30 yr fixed, now we are at 6.0% 30 yr fixed.

We put no money down.

[HHM]

This is actually my own personal opinion. The fact that almost every 3rd house on every street in Stockton is selling for $175K - $250K, versus $400K that it once was, tells ME that it's a great time to buy.

We aren't buying just to have to sell later, so the market going 'back up' is not in our interest. We just want a house that's OURS, that we can afford and that we'll be in for years and possibly give to the kids later.

So for me, it's a great time to buy. Unless I am missing something. I'd rather buy now while the prices are low then wait til the market goes back up and have to pay 3 and 4 hundred thousand dollars. At least with a $150-250K mortgage, I won't be worried if something happens to us financially. We would be able to skate by with just one income on that kind of mortgage.

I think his point is, and I concur, that those houses that are now $175-$250 are going to be selling for $155-$215 by the end of the year.

I would not, under any circumstance, buy a house right now financing at 100% LTV. If you buy a $200K house now at 100% LTV, you are easily throwing $10K out the window because that is how much the house will depreciate by the end of the year. Others may disagree, but I don't see ANYTHING on the horizon that is going to change this trend in the short or medium term. Just today, Bear Sterns, one of the largest brokerage/finance companies announced they are seeking emergency funding...that is bad, it means they have no liquid cash to pay interest and dividends to investors, and Bear Sterns lost half its value because of mortgage lending exposure.

Keep in mind, when you buy a house with a mortgage, you ARE NOT buying an asset, you are buying a liability. Right now, about the only benefit to owning a house is the mortgage interest income tax deduction.

I think you are suffereing from buyers frenzy. Step back, look at things objectively, don't simply look at your payment. My sense, since you let a house go in BK, you are emotionally committing yourself to home ownership which is clouding your judgment.

[JeepMom]

My house went up in value by 12% in the last year. BUT I lived in a very different market.

[chpxiii]

I agree with HHM. And I have a very good feeling (after obsessing over housing prices for the last year) that house prices *will* go down even further.

Look, I've not EVER owned a house. (Well, I did live in one as a kid, but that got foreclosed on so I know what it's like to see a stressed out single mom go through that.)

There was a point there this past winter where I was very nearly desperate. I wanted a house so badly. I wasn't discharged yet and was anxious. I probably, actually, could have looked into getting into a house. But I want to my 20% down more than I desperately want to get in a house. So I wait.

And I am glad I did. Housing prices are still expected to go down even further and interest rates may even go down as well. Also, considering the way things are going, while house prices *are* low, it actually may not be a good time to buy, IMO.

So, as a coworker told me one time, "chillax, missy." hehe... patience. If you want to own a house, you will. It may not just be right now. Trust me, I know. I've never owned one. I am 39 years old. I'm only now able to save for retirement. I've never even began to start building equity and time is against me. But still, I sit and wait. It's not yet the time to make a move.

[I want out]

The fact that almost every 3rd house on every street in Stockton is selling for $175K - $250K, versus $400K that it once was, tells ME that it's a great time to buy.

Yesterday's prices are not a yardstick for today's value.

If you buy tomorrow at 250, and two years later, that house is worth 200, that's a fair amount of money, no?

That's a 20% decline.

If you're okay with that kind of downside risk, then go for it.

If not, I'd suggest you start tracking your local market VERY closely. The metrics to watch would be average sales price, number of listings, houses pending, closed sales, and average days on market.

Start this month. Get the last 6 months' data, and update your figures each month.

When the current trends begin to reverse, THAT'S the time to buy. And one month's worth of good news does not necessarily indicate a reversal.

[HHM]

Special markets notwithstanding, the ONLY way for this housing market to fix itself is for prices of houses to come down further. Interest rates are as low as they were when all the speculative buying began 5-6 years ago, but now we have a HUGE surplus of houses on the market. Basic supply and demand, the only way to stimulate demand when there is an oversupply is for prices to come down.

The root issue is that about 3-4 years ago, the price of houses outran the average income of a person to support a payment at that level. Only in the last year have we seen the true consequences.

[cali girl]

I think his point is, and I concur, that those houses that are now $175-$250 are going to be selling for $155-$215 by the end of the year.

I would not, under any circumstance, buy a house right now financing at 100% LTV. If you buy a $200K house now at 100% LTV, you are easily throwing $10K out the window because that is how much the house will depreciate by the end of the year. Others may disagree, but I don't see ANYTHING on the horizon that is going to change this trend in the short or medium term. Just today, Bear Sterns, one of the largest brokerage/finance companies announced they are seeking emergency funding...that is bad, it means they have no liquid cash to pay interest and dividends to investors, and Bear Sterns lost half its value because of mortgage lending exposure.

Keep in mind, when you buy a house with a mortgage, you ARE NOT buying an asset, you are buying a liability. Right now, about the only benefit to owning a house is the mortgage interest income tax deduction.

I think you are suffereing from buyers frenzy. Step back, look at things objectively, don't simply look at your payment. My sense, since you let a house go in BK, you are emotionally committing yourself to home ownership which is clouding your judgment.

That's what I initially thought he was saying... but then it sounded like he thought I was thinking something else. I certainly hope they continue to go down.

Well, it's not that I am just dying to be a homeowner again. I don't mind renting. But what I'm looking at is that we bought a 25-year old home in 2005 for $310K. I'm looking at 1 year and 2 year old HUGE homes going for half that price.

I just don't want to miss the boat and regret it later if the market picks up. I am not saying that I know it will, I'm just feeling like "what if" in the next two years (which is a long time), the economy picks up and the housing prices skyrocket again. I will regret not taking the opportunity while I had it.

[HHM]

the economy picks up and the housing prices skyrocket again

That is your fatal assumption that is feeding your buyer frenzy. It is going to be many years before we see the same type of housing market that we saw 4-5 years ago (25-50% increases in value in 1 year time). Over the long term, real estate prices appreciate relatively slowly. Thus, I would not worry about suddenly facing a "huge" increase in prices over a short period of time.

You really need to let your financial position decide when to buy, if you have to do 100% financing, you are NOT ready to buy. If you are not 2 years out from BK, you are NOT ready to buy.