buying a second house before losing the first

[joskimad]

I have my first house in new jersey for sale at a reduced price for
a fast sale.(so far no luck)The house is no longer affordable and I have taken action. While I am still current I have arranged financing for a new smaller home in florida and have found a good job. I can only afford one mortgage payment and I am closing next month. If the house does not sell by next month I think I will be in serious trouble. What can happen to me if this should occur and does anybody have any ideas??????

[B12]

Hi Josk

Does the financing on the new home include a bridge loan on the equity of the house in NJ or is it an independent mortgage?

[joskimad]

I don't have much equity in the old house. But The new mortgage is independent. Fannie mae actually.

[B12]

If you qualified under fannie mae guidelines, you must have a good income to qualify for both the existing mortgage and the new one, especially with the one in NJ being on the market and not rented out.

In essence, the lender is saying that you can afford both mortgages. Is it a full doc loan?

[joskimad]

Yes it is a full doc loan.

[B12]

Well, as far as the real estate end of it, you are okay in what you are doing.

As far as foreclosure and BK, someone else more experienced will chime in soon.

My concern would be that if you do not file BK, in Florida, although there is no forced sale, they can put a lien on your house for the old mortgage. Also, there is a waiting period in Flordia for filing BK. If you do not file BK with the foreclosure, the lien will stay on your new home until sold and the judgement will then be paid off.

[joskimad]

Now that I think is untrue. If you research the asset protection laws in Florida,you will find that they can't touch your home or any other asset provided that your primary residence is florida.http://www.alperlaw.com/moving_to_florida.html

[emoney]

I really urge you not to close on the second home until your first home is sold and closed. I am also surprised that you could qualify for new loan without sale of first home.
A better idea is to rent for six months to one year so you can get the feel of the market and not make a mistake. Also the price of homes in Florida falling you could possible make a better deal late on.
regards,
emoeny

[dscurlock]

I have my first house in new jersey for sale at a reduced price for
a fast sale.(so far no luck)The house is no longer affordable and I have taken action. While I am still current I have arranged financing for a new smaller home in florida and have found a good job. I can only afford one mortgage payment and I am closing next month. If the house does not sell by next month I think I will be in serious trouble. What can happen to me if this should occur and does anybody have any ideas??????

wow, your not even moved into the new job in another state, and you are ready to close, sounds risky, but hey, ok...
are you going to like your new job, is your job going to like you
after your 90 day trial?? There are so many reasons why I would wait instead of jumping from one house into another, possible another mistake, its obvious you make a good amount of money, and possibily even have good credit, but maybe not for long, take their advice, get your old house settled and off your back before leaping into another one.

[B12]

Hi Josk

Don't know which part you think is untrue, but a lien can be put on your house in FL, just cannot force the sale to satisfy it. It stays in place until you sell and pay it or you declare BK and it is dismissed.
Also, after a waiting period, your entire equity is protected in a BK case.

Your homestead rights become effective immediately, your BK is about a 2 year wait.

Read the Alper site again.

As for advising you to do this or not........I'm sorry folks, it is none of our business whether he proceeds or not, he is only asking for facts here.

[joskimad]

I have 4 kids and a very tight budget in new jersey. With my taxes at almost 11000 annually and all my other bills,I find myself going through my savings to stay and live in new jersey.The new lower mortgage payment and lower cost of living will allow us to lead a better less financially stressed lifestyle.

[Hillbilly]

Sometimes you just gotta to do what you gotta to do, for the good of your family, and just to survive.
It has now been almost two years since I did just what you are now contemplating.
Seeing the "writing on the wall", I bought and moved into a much less expensive home in another state, (where my property taxes are now less than 1/10! of my former residence)
I was "upside down", on my old house in Michigan, and could not profitably sell, refinance, nor any longer afford the constantly escalating property taxes.
So having no other workable or practical options, We stopped making the mortgage payments and allowed it to go into foreclosure.
(as an aside, we weren't the first, and today there are 5 homes on that same block, vacant and in foreclosure)
The question arises, will there be "trouble down the road?"
Perhaps so, but then "trouble" was already present and at our door, so we did the best thing that we could under the circumstances. at this point we have no regrets.
We have kept all of our other payments current, and actually have heard very little at all thus far from the holders of our old mortgage, other than the required notifications of the foreclosure process, and of the note having been successively "sold" to other companies (4 times now, each on acquisition has sent us a bill requesting the immediate payment of the entire amount) More like a formality, in that we have already lost the place to foreclosure because we couldn't even afford the monthly payment, nor obtain reasonable refinancing, even if we were by some miracle able to produce the requested money, the house is now as much as long gone, out of our name, and is no longer ours. At present it leaves us nothing to do but ignore such asinine requests.
Now perhaps down the road, -someday-, if and when they are finally able find a buyer for the property, they may pursue a "deficiency judgment", however, I believe that also will prove to be a fruitless fishing expedition for them, in that we are retired, on pension, and have nothing of significant value that is not exempt in BK.
We did also have a "second", A "Home Equity Line of Credit" (HELOC), of course there is no "equity" for them to go after, and they can't collect by foreclosing on the property that the first mortgage holder has already foreclosed on, so they have been quite aggressive with the phone calls, Again, they may eventually obtain a "judgement" but it would be futile, uncollectable, and in BK, voided.
Now obviously, you are younger, have children, and your income/asset situation is different than ours. But like I said at the beginning, Sometimes you gotta do what you gotta do, for the good of your family, and just to survive.
Will there be consequences down the road? Yep, more than likely, but then again there WILL also certainly be consequences if you don't make the move.
That's life, stuff happens, If you are proactive, you weigh the consequences, make the decisions, and the moves. If you do not, then stuff is STILL going to happen, only you won't be in control, but will certainly become a victim of someone else's decisions and moves.