3 ms·

In California & Washington mortgages are non-recourse, ie they are secured by the property itself and nothing else. So if your financial situation deteriorates

In California & Washington mortgages are non-recourse, ie they are secured by the property itself and nothing else. So if your financial situation deteriorates to the point where you are forced to foreclose, you lose the equity in the home, but your other assets are protected.

leereeves 4y ago
But even a non-recourse foreclosure tanks your credit rating and makes it difficult to rent or buy another home, right?
- dragonwriter 4y ago
  > But even a non-recourse foreclosure tanks your credit rating and makes it difficult to rent or buy another home, right? Been through essentially that (it was actually a short-sale in a non-recourse state, not a foreclosure, but in most effects the two are pretty similar.) So, yeah, because we didn’t rent the new place immediately when we realized that there was a problem but after some period of nonpayment (but before the short sale was finalized), we had to find an individual landlord who managed property directly rather than one managed through a management firm that ran applicants through a hands of screening process before even looking at them (who we found, before the apartment was publicly listed, through an real estate agent who we first contacted because they had listed their house for rent and it was at the high end of what we were looking at, and who we also ended up working with on the short sale.) Once financial circumstances turned and we were in the market to buy again – within the 3 year period of ineligiblity after a short sale for an FHA loan – we had relatively little problem finding acceptable financing, though we paid slightly higher (but still tolerable) rates, and were able to refinance into better rates a couple years later.
- surfaceofthesun 4y ago
  Yes. This is anecdotal, but I saw relatives go through foreclosure in the GFC, then get approved for a different (larger) mortgage 5-6 years later.

leereeves 4y ago

But even a non-recourse foreclosure tanks your credit rating and makes it difficult to rent or buy another home, right?

dragonwriter 4y ago
> But even a non-recourse foreclosure tanks your credit rating and makes it difficult to rent or buy another home, right? Been through essentially that (it was actually a short-sale in a non-recourse state, not a foreclosure, but in most effects the two are pretty similar.) So, yeah, because we didn’t rent the new place immediately when we realized that there was a problem but after some period of nonpayment (but before the short sale was finalized), we had to find an individual landlord who managed property directly rather than one managed through a management firm that ran applicants through a hands of screening process before even looking at them (who we found, before the apartment was publicly listed, through an real estate agent who we first contacted because they had listed their house for rent and it was at the high end of what we were looking at, and who we also ended up working with on the short sale.) Once financial circumstances turned and we were in the market to buy again – within the 3 year period of ineligiblity after a short sale for an FHA loan – we had relatively little problem finding acceptable financing, though we paid slightly higher (but still tolerable) rates, and were able to refinance into better rates a couple years later.
surfaceofthesun 4y ago
Yes. This is anecdotal, but I saw relatives go through foreclosure in the GFC, then get approved for a different (larger) mortgage 5-6 years later.