If your home is IIB, you should get out and rent now--right?

[Tom_Mi]

I think this has been said in 100 ways in this subforum, but I'm looking for clear guidance before I make a move.

We need to move. We want a house. Our current home was IIB because it's 70k upside down.

If we quit paying the ridethru payments and save hard for the 10months we can stay here free...

-The loss of this house in 10mo counts as a foreclosure, and resets the FHA 2yr mortgage clock to begin 1 FULL YEAR after our discharge?.

-We need to get out now and get the bank to take posession asap to start the clock fast?

-We must rent for 3yrs??? (with 3 small kids, a dog, a lizard, and all equipment for maintaining a home on a 2acre lot)

[hereforinfo]

Moving out will not make the bank foreclose any sooner. You are better off staying there for free as long as you can.

[justbroke]

-The loss of this house in 10mo counts as a foreclosure, and resets the FHA 2yr mortgage clock to begin 1 FULL YEAR after our discharge?.

Resets to 3 years for a foreclosure, from the time the property actually has a change in title/deed.

-We need to get out now and get the bank to take posession asap to start the clock fast?

No. The bank can drag its feet. It could take a year before they foreclose. I've been waiting 18 months for a foreclosure.

-We must rent for 3yrs??? (with 3 small kids, a dog, a lizard, and all equipment for maintaining a home on a 2acre lot)

Basically, yes.

However, you may be able to do a short sale, and make sure that FHA is okay with this. Close the "short sale" on the same day you purchase the new FHA home. This would still require you to be discharged for 2 years before getting your FHA loan approved.

You are still going to need downpayment money (minimum 3-5%) and have good payment history since your BK.

[StartingOver08]

I have been waiting since May 2008 for a foreclosure - getting out does not force the bank to move any faster. Take advantage of your free rent time to build up savings. Also, it is better if you are in the property, you can maintain it (minimally) while you are saving the rental funds/mtg funds.

[Stilltheone]

We're in the same boat as you and are upside down in our home about $35K-$40K, if we're lucky. Our mortgages were IIB, but we are still here. Why?

Here's the way I look at it. I love my house. I love that my kids have an almost brand new house. I know I want another one someday, but in the meantime, I would rather wait in my almost brand new house...wait for the market to come back, wait for home prices to increase a little bit. I am one that absolutely refuses to rent. I'm basically renting my house b/c my mortgages are interest only. If I'm going to rent, I might as well live in my home, not in a tiny apartment.

I wish you luck in the future in whatever you decide!