patrick.net

Condohelp,
I'm sympathy with your situation. Since you refied, walking away may come back to haunt you down the road. Keep paying the losing house is painful but seems an option to consider. Since your hubby made a bad choice, and if your husband has a decent income, you may consider stay put for few more years, put extra into your monthly payment. The goal is to pay down the load asap. Raising a kid in 700sft condo is suck but you will adapt to it. That is the price you have to paid for making bad decision. You will be amazed how human adapt to the environment when thing changes. If you really plan to move, it does not hurt to work with the lender to come up with a short sale and agree to pay certain portion of the deficiency. Not sure lender will agree but does not hurt to try.
Very one last option is to file chapter 7 or 13 to get out of this mess. But your husband may need to prepare for about 5-7 years of rough time.
It may come down to the choice of saving your husband's credit with 100k and with this credit he can recoup the loss within 7 years or sooner. If not, why bother.
I do know people declare bankcruptcy and still live well after couple years and keep driving Benz under wife's or husbankd's name.

Just my 2 cents.

http://www.housingbubblebust.com/OFHEO/Major/NorCal.html

You're underwater losing $1000/mo means you're losing "value".
Your hubby took the loan back in 2006 thinking it's ok. That was a mistake and you guys are paying for it now. Sorry to hear that though.

But, nothing has been really changed at all. Your physical loss is zero. You're not paying a penny more or throwing ten hundred dollar bills into the drain hole. What changed is your emotional view on the mortage you already have and perception on your condo as market fluctuates. It is loss in value, which is the loss that is not yet physically realized. Real physical loss occurs when you sell the condo at decreased price.

You may not like this idea though, you knew you don't need additional room if you can phostpone your family starting plan. You're not pregnant, are you?

By speculating the fact that your hubby was able to pull off 300K loan under his name only, and both of you're currently employeed, it looks like you guys are financially capable of managing the situation even if you're underwater. You're not on the verge of bankrupty or anything. You're just worrying about deceased home value. In fact, I think you're starting to save your combined income for the future. So please set your desire aside for a while, and think hard. Don't let the hope slip away because of this conceptional loss not yet realized.

Condohelp says

no companies will hire him and that he will never be able to apply for a security clearance.

Bad situation. I hate to say this but your husband is right - if he applies for a security clearance, he will be asked about financial defaults, liens, evictions, repossessions, foreclosures, etc. How much walking away from the condo will potentially impact an approval? The Department of Defense does about 90% of all security clearances - perhaps one of you might know of someone to ask, and help make an informed decision on this? Does anyone know how a typical HR department would view walking away?

Condohelp says

He is mainly worried that he will never be able to buy a house even after 7 years,

Frankly, I wouldn't sweat that as much. You can rent a lovely home for significantly less than purchase/monthly payments/maintenance anyway. THAT difference can be put towards the college funds.

Coming at you from the world's most cramped city: keep the condo, keep paying down the mortgage you've got, and raise your first kid in it. It's not too small.

Over six hundred square feet isn't that cramped. Most of the units in my building are 38 m^2 or just over 400 square feet, and while most are either childless or retired couples, several contain couples raising one kid -- the family across from us has two teenagers!

What's unsafe about the second floor of your building? Is there an open balcony with no fence? Putting up some barriers or blocking it off somehow would be a lot cheaper than moving just so that you don't have to be on the second floor.

How high are your ceilings? Whenever I'm back in the US, I notice people not making use of the fact that their ceilings are often 10 feet tall. Get shelves that are that high instead of letting all that upper airspace sit unused!

If you rent the place out and then go rent a marginally-better place just for a few extra square feet, you're effectively paying $1000 per month just for those square feet. You're also gonig to have agent fees siphoning away your money. Just stay in the place and make do with it. Lots of people raise kids in smaller spaces.

Condohelp,

Given your parameters I would rent the condo.

First your 2,000 cash payment includes about 400 in principle repayment and does not include tax benefit, whatever that is.

Ditch the management company for the rental. Just use craigslist for rental. 1,000 – 1,200 condos are not hard to rent out and since it is not particular expensive nor volume, the cost as a % will not be cheap.

Ask/demand the county for a property tax reassessment now, there is no way you should be paying your 2006 basis, you will win, the question is how much you can get. The county has to follow certain assessment parameters.

In your case, passive income above the line deduction may be more valuable than a mortgage interest itemized deduction. This is because your HOA fee, expenses, management fees and depreciation are all deductable. Say if your interest, tax, HOA and depreciation, and expense is 2,400 a month and rent is 1,200, you have about a 1,200 a month loss. If your tax bracket is 33% fed and state, that is 400 a month in current tax savings. You can turn a lot of post tax expense into pre-tax expense as well. Read about passive loss under IRS, the best value is if your AGI is around 120K (this is because you only need about 15K in loss, so the phaseout effect will start around 120K MAGI). The key here is that your 300K condo (not much land) basis is depreciable over 27.5 years or about 900 a month of non-cash loss.

Your actual cash outlay is really 2100 a month, less 400 toward principle and less 400 in tax savings = 1,300. If you can get rent that unit for 1200, you should be able to absorb the 100 cost. In fact, the property tax assessement should do it. It is much better than spending 100K to exit.

That’s what I would do. The second part is making more money to get the living situation you desire. If money is the obstacle, there are two fixes, cut costs or make money. make money is the more desirable route.

Condo,

Echoing the sentiment of others...sorry to hear about your situation. You may have read a very similar thread started by therapy--very similar situation. I'm sure you and your husband have discussed the practical side of your current living situation and the impact on your desire to have a family. Nevertheless, since it hasn't come up in the thread, I suggest you radically change your lifestyle expectations. Unless you and your husband find a way to start generating significantly more money, this condo (or the financial ramifications of foreclosure) will be with you for the indefinite future. You have to accept that. You and your husband's decisions have resulted in this situation. The positive is that you don't have a baby yet; so your "space" concerns are not realized yet.

You could simply hold off on having children. The flip side is that you could have a child and live in your condo. It can be done. You may not have ever imagined this kind of reality, but that shouldn't stop you. Families are raised in less than 675 sq ft all over the world. You can do it.

I like the renting idea; however, your comment about getting a service to do it for you at 10% is simply another bad decision in what no doubt has been an long line of bad decisions. I encourage you to change your perspective. You live in a 675 sq ft condo!! You can't afford to hire a property management service to rent out your condo. You have to handle being a landlord all on your own. Again, you can do it. Less time for email, web surfing, and posting on patrick.net, of course, but you have to do what is financially smart. Throwing away 10% of your rent on a property management service is stupid.

Go get'm Codo. We believe in you. Also, hook up with therapy. You two have a ton in common.

-Hooch

PS Check out Dave Ramsey. Also, go read the Millionaire Next Door. Great financial perspectives for these times.

Read about passive loss under IRS, the best value is if your AGI is around 120K.
I'll take your word on that! Just discovered the phaseouts are based on modified AGI. They make you add your IRA deductions back into AGI for modified AGI (no free lunch!). Nice post SF ace.
unlike most Americans we did not buy more than we could afford at the time
I know plenty of folks in $500k 2/1s that will be stuck there forever (raising their families). It appears we've reached the grind it out phase where the responsible ones now have to figure out what to do. Next stop, rental parity for condos.

TT says

Since the mortgage is in your husband’s name, I recommend you divorce this idiot and go find a smarter guy.

Right. Financial stability is definitely more important than being with someone you love.

It sounds like you need to figure out what your priorities are. IMO, you're placing too much emphasis on your credit score. The concern about not being able to buy another house in 7 years is BS. As much as it pisses me off (being a renter, saving, waiting for prices to come down), 7 years from now there are going to be so many people in the same boat that a foreclosure or bankruptcy won't prevent you from getting another home loan. The gov't can't afford *not* to give people who bought in the bubble a clean slate.

As for a security clearance: why? Is his future income potential really going to be limited by not having one? The reason foreclosures and bankruptcies hurt security clearances is the concern that a financially irresponsible individual would be more likely to sell classified information to dig themselves out of a financial hole. If you have a foreclosure on your record but a sizeable savings cushion and no other debt (credit card, etc.) he may still be okay.

Think about it this way: how much would you pay to buy a perfect credit score or a security clearance? If you wouldn't pay 50k for a perfect credit score, you shouldn't be willing to sink 50k into preventing your score from getting damaged.

Since you refi'd and your loans are probably recourse loans, this may all be moot. Stopping payments and walking away doesn't work so well if the bank can come after you for the remainder.

seaside says

You’re underwater losing $1000/mo means you’re losing “value”.

Your hubby took the loan back in 2006 thinking it’s ok. That was a mistake and you guys are paying for it now. Sorry to hear that though.
But, nothing has been really changed at all. Your physical loss is zero. You’re not paying a penny more or throwing ten hundred dollar bills into the drain hole. What changed is your emotional view on the mortage you already have and perception on your condo as market fluctuates. It is loss in value, which is the loss that is not yet physically realized. Real physical loss occurs when you sell the condo at decreased price.
You may not like this idea though, you knew you don’t need additional room if you can phostpone your family starting plan. You’re not pregnant, are you?
By speculating the fact that your hubby was able to pull off 300K loan under his name only, and both of you’re currently employeed, it looks like you guys are financially capable of managing the situation even if you’re underwater. You’re not on the verge of bankrupty or anything. You’re just worrying about deceased home value. In fact, I think you’re starting to save your combined income for the future. So please set your desire aside for a while, and think hard. Don’t let the hope slip away because of this conceptional loss not yet realized.

Great post Seaside.

You've got more options than you think. I can think of 3 right now.

1.) How about just trading your husband? It looks like that could save you a ton of dough.

2.)Could you afford to buy another house with a loss of $1000/month on your rental? If you could I would buy another house then just walk away from the rental.

3.)You could just walk away and rent. Save your money for a downpayment and then find an owner who will hold paper for 5%, or wait 5 years and then buy. A retired person (my parents exactly) would love to get 5% tax free on a private mortgage to someone.

Knewbetter,
I'm not leaving my husband!

knewbetter says

1.) How about just trading your husband? It looks like that could save you a ton of dough.

Condohelp says

Knewbetter,
I’m not leaving my husband!

He said "trade," not "leave..." Sometimes you get a newer model with all the bells & whistles...

:)

LOL elliemae.

Before throwing in the towel on the credit rating agencies being the frizzin' Stazi I would do some research on that; you could hire a private investigator who does security work to profile you with and without the walkaway and give you his report. It may not matter all that much.

If real estate debt problems and consumer debt problems interfered with security clearances I think a large chunk of our finest would not be in Afghanistan right now.

300K for 600sf???
you could have bought a new 1800 sf modular in a park at the peak of the bubble for 130K.....
enuf room for 10 kids!! wit Real Pergo on the floors!
they'd call u 'trailor trash' for awhile, but you'd git the last laugh drinkin in starbucks every morning while watchin yer 65K earn 7% in the 5yr CD you would have bought in 06....

E-man,

it can mean a lot of things, depending on what kind of work you do. Like, in the defense industry.

E-man says

Before I get on with my rant, it would be helpful if I can understand what “a security clearance” means :o)

It means a Commie Fascist way of keep the Black man down(not blacks are black these days haven't you "heard")

A bad credit rating can among other things, can keep you finding a job, renting the right place and get you fired from a job you already have.

It was a Cluster fuck wrought with flaws in the logic from the start. It kicked up momentum to use credit Ratings as the Star Belly maker in the late 90's and really vamped up in the early 2000's when every Ghetto/White trash was buying a McMansion. It was a way to separate the "Good wholesome desirable people" from the "Lower rungs, with a Lincoln Navigator and BJ's card".

What we've got now, is most of our Government finest on the Beltway, has defaulted since then. And so has the majority of the people in Burbdale.

I have it on good faith from a friend who works for a Phone bank, that solicits homeowners for home improvements. 80% of the homeowners in 300K++ homes, he pulls a credit score for, have credit score lower than a 560.

It's so bad, I don't even wear interview clothes when I go on job interviews.
I don't have to, there's such a shortage of people with a passing credit score, they have to put their Business wear portion of the beauty/job pageant, of on hold.

I predict that with in 5 years, since most of our Congress critters, and people that work in Washington are teetering on a bad credit score, will do away with using a credit score for job worthiness.

Either that or the caliber of help will go down hill, well more so than it always has been.

condohelp,

You're thinking about the cost of renting it out incorrectly. Right now you owe X per month in your mortgage HOA and taxes. If you rent out your current place and also rent out a larger home for yourself the only added expenses are the loss of the mortgage interest deduction (after some number of years) and the DIFFERENCE between what you can get on your condo and the cost of your new rental.

So the relative loss versus continuing to live in the 1 bedroom is smaller than you may be thinking. If you sacrifice on commute a bit, you may be able to rent a 2-3 bedroom townhome for close to the same amount as renting out your condo.

Or you could invest $100k in time-machine technology and not buy anything in 2006.

There MAY be hope for those who refinanced and need to walk away:

http://www.car.org/newsstand/newsreleases/1178senatevote/

Senate approves SB 1178 extending anti-deficiency protection
For release:
Thursday, June 3, 2010

Victory for consumers as California Senate approves SB 1178 extending anti-deficiency protection

Measure protecting consumers from overreaching lenders now goes to Assembly

LOS ANGELES (June 3) – The California Senate this morning approved SB 1178 (D-Corbett) by a 30 to 4 vote, extending anti-deficiency protection for consumers who have refinanced their original mortgage loans and now are facing foreclosure. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) is the sponsor of the consumer protection legislation.

“Currently, if a homeowner defaults on a mortgage used to purchase his or her home -- known as a 'purchase money mortgage' -- the homeowner's liability on the mortgage is limited to the property itself,” said C.A.R. President Steve Goddard. “Unfortunately, the original law did not extend the purchase money protection to loans that refinance the original purchase debt, even if the refinance only was to obtain a lower interest rate. SB 1178 corrects this inequity and extends the same protections to consumers who refinance their home loans.

“Today’s vote was a victory for homeowners in California,” he said. “SB 1178 now moves to the Assembly for approval. C.A.R. is calling on our elected representatives to swiftly pass this much-needed legislation and send it to Gov. Schwarzenegger for signature.”

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with nearly 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

strategic default ... you'll save 150k which is about 7 years of savings from career. you may miss out on security clearance jobs (worst case scenario - may not be true), but you still find other work anyway.
Keep paying HOA, but stop paying 1st, second and property taxes and keep living there until house is sold at auction. Banks / collection company may come after you for the outstanding amount after foreclosure, but that would be negotiable if it happens.

E-man,

My husband is an engineer and may want to apply for a security clearance for a government job.

Aslo, does anyone know how long a foreclosure stays on your credit report. Does it ever actually leave the report? Thanks.

Tenouncetrot,

I don't know that many places that actually check credit ratings for work anymore. My main concern is if he applies for a security clearance.

People make mistakes everyday and you need to live with the consequences. What's new here???

Your husband made a mistake buying at the wrong time. So, he paid for it.

You made a mistake committed to this relation without knowing the whole picture of your husband (financial situation, decision making skill etc). So, you paid for it.

There are 3 advices I can give you:
1. "Think before act"
2. "Don't let fear or greed drive your decision"
3. "Face the brutal reality" The reality is: You & your husband are financially screwed. Live with this fact and move on from here

condohelp,

Don't assume walking away will keep you from getting (or losing) a security clearance. Find out! Ask around! Maybe you can even hire an expert who used to do such profiling for the government for some insight on it.

Don't give up so easily.

Condohelp.

Before your hubby got confirmed in government position, he will be required to provide them some info not only his, but families on both sides. It's usual history, background and status stuff. Tideous, nothing to worry about unless it related to certain type of criminal activities, or few countries tied to terrorism or war with US.

His, sometimes your, financial, criminal or drug related record matters. They see it as irresponsibility or lack of willingness, and thus, that could be a reason getting denied in certain positions. They do check background from time to time on their employees.

Here's a link you want to read.

http://www.state.gov/m/ds/clearances/60321.htm#f

Foreclosure record usually stays 7 years on credit reports, you can start build credit and can get a loan within 2 years though.

masayako6412 says

People make mistakes everyday and you need to live with the consequences. What’s new here???
Your husband made a mistake buying at the wrong time. So, he paid for it.
You made a mistake committed to this relation without knowing the whole picture of your husband (financial situation, decision making skill etc). So, you paid for it.
There are 3 advices I can give you:

1. “Think before act”

2. “Don’t let fear or greed drive your decision”

3. “Face the brutal reality” The reality is: You & your husband are financially screwed. Live with this fact and move on from here

Post like this get old! I'm asking for advice not for someone to tell me that "I'm screwed". Also, I was 22 when I moved in with my boyfriend, now my husband, and very in love, the housing market was not a thought in my mind. He bought because he thought renting was a waist of money and he did not expect to "cash in" like others have assumed. Trying to figure out a way out of our situation is not about greed! I can't handle having no space for cooking, for putting things away, for keeping our wedding gifts, for inviting others over, and to soon have children. Is it really greedy for us to want to move on with our lives????

I think responses like this are born from disgruntled individuals who have imperfect lives!

seaside says

Condohelp.
Before your hubby got confirmed in government position, he will be required to provide them some info not only his, but families on both sides. It’s usual history, background and status stuff. Tideous, nothing to worry about unless it related to certain type of criminal activities, or few countries tied to terrorism or war with US.
His, sometimes your, financial, criminal or drug related record matters. They see it as irresponsibility or lack of willingness, and thus, that could be a reason getting denied in certain positions. They do check background from time to time on their employees.
Here’s a link you want to read.
http://www.state.gov/m/ds/clearances/60321.htm#f
Foreclosure record usually stays 7 years on credit reports, you can start build credit and can get a loan within 2 years though.

Thank you!

Condohelp says

masayako6412 says

People make mistakes everyday and you need to live with the consequences. What’s new here???

Your husband made a mistake buying at the wrong time. So, he paid for it.

You made a mistake committed to this relation without knowing the whole picture of your husband (financial situation, decision making skill etc). So, you paid for it.

There are 3 advices I can give you:
1. “Think before act”
2. “Don’t let fear or greed drive your decision”
3. “Face the brutal reality” The reality is: You & your husband are financially screwed. Live with this fact and move on from here

Post like this get old! I’m asking for advice not for someone to tell me that “I’m screwed”. Also, I was 22 when I moved in with my boyfriend, now my husband, and very in love, the housing market was not a thought in my mind. He bought because he thought renting was a waist of money and he did not expect to “cash in” like others have assumed. Trying to figure out a way out of our situation is not about greed! I can’t handle having no space for cooking, for putting things away, for keeping our wedding gifts, for inviting others over, and to soon have children. Is it really greedy for us to want to move on with our lives????
I think responses like this are born from disgruntled individuals who have imperfect lives!

Yet you are the one who asked for the advice. Have you considered the fact that posts like yours get old? How many people just like you do the rest of us have to hear from every day??? Oh, housing was never a thought in my mind. I was in love. I just thought it would all work out? Do you realize how you sound?? Perhaps what you need to take away from your request for help is that "you are screwed." Sorry but sympathy only goes so far. Since you don't seem all the worked up about it, why don't you just learn to live in the space you have. Love your husband. Have a child. Accept reality and live your life. The rest of us don't want to bail you and legions of automatons out. Pay your own way...figure it out...time to take action. You got a lot of great feed back. Time to do sometime condo.

hooch_raider says

Condohelp says

masayako6412 says

People make mistakes everyday and you need to live with the consequences. What’s new here???
Your husband made a mistake buying at the wrong time. So, he paid for it.
You made a mistake committed to this relation without knowing the whole picture of your husband (financial situation, decision making skill etc). So, you paid for it.
There are 3 advices I can give you:

1. “Think before act”

2. “Don’t let fear or greed drive your decision”

3. “Face the brutal reality” The reality is: You & your husband are financially screwed. Live with this fact and move on from here

Post like this get old! I’m asking for advice not for someone to tell me that “I’m screwed”. Also, I was 22 when I moved in with my boyfriend, now my husband, and very in love, the housing market was not a thought in my mind. He bought because he thought renting was a waist of money and he did not expect to “cash in” like others have assumed. Trying to figure out a way out of our situation is not about greed! I can’t handle having no space for cooking, for putting things away, for keeping our wedding gifts, for inviting others over, and to soon have children. Is it really greedy for us to want to move on with our lives????

I think responses like this are born from disgruntled individuals who have imperfect lives!

Yet you are the one who asked for the advice. Have you considered the fact that posts like yours get old? How many people just like you do the rest of us have to hear from every day??? Oh, housing was never a thought in my mind. I was in love. I just thought it would all work out? Do you realize how you sound?? Perhaps what you need to take away from your request for help is that “you are screwed.” Sorry but sympathy only goes so far. Since you don’t seem all the worked up about it, why don’t you just learn to live in the space you have. Love your husband. Have a child. Accept reality and live your life. The rest of us don’t want to bail you and legions of automatons out. Pay your own way…figure it out…time to take action. You got a lot of great feed back. Time to do sometime condo.

I just posted this a little over a week ago...in response to: "Time to do sometime condo." First off, learn to spell! Second, we need to consider all of our options before we make a decision! If posts like mine get tired then don't read them! I'm reading my responses so that I can find helpful suggestions. The rest of what you have written does not deserve a response.

mail the keys to the bank and go rent something-----------that was easy

E-man says

@ Condohelp,
I still owe you a response. In my opinion, you have plenty of options. It just takes some planning. First, I would talk to an attorney who knows how to remove the short-sale/foreclosure off of your credit report. I believe it would cost around $1,000. Yes, it can be done. Let me know if you need some attorney contact info. Due your due diligence first please.
Here is one of the options. I’d divorce the husband on paper. Not in real life of course. This way, his credit doesn’t impact your buying power. Have your own bank account and direct deposits on this account. Buy another place on your own salary or maybe with your or his parents/brother(s) or sister(s) as co-signers. Then you guys can decide to do whatever with this condo afterward. It is my understanding that the attorney could remove the foreclosure off of your husband’s credit report permanently. This would be a non-issue in terms of security clearance later on. However, I would consult with an attorney first to ensure that’s the case.
Good luck.

Hi E-man,

Thanks for the advice. We are finally meeting with our accountant tomorrow morning to discuss possible write offs for a loss if we make this a rental. If we do decide to go the foreclosure rout or short sale (which we don't currently qualify for), and at this point it's doubtful we'll foreclose, I will need to contact an re attorney. I'm wondering if I should contact one soon anyway to see if they could help us ask the bank for a short sale.

As far as divorce goes I'm extremely uncomfortable with that, and I know my husband would be too. Even if we did that I wouldn't qualify for a home loan on my salary anyway since I earn a beginning teachers salary. I also wouldn't want to ask anyone for help, especially since both sets of our parents have their own financial burdens to worry about.

Condohelp,

The accountant is probably not a security clearance expert. Find out from someone who knows about such matters, if strategic default will prevent you from getting your clearance. Betcha it won't. I know people who made all kinds of mistakes get and keep clearances when I worked in the defense industry.

I knew people with clearances, even high ones, who lived together out of wedlock, even had kids in such an arrangement, others with alternative lifestyles. No big deal.

But a sham divorce in order to game the system like E-man told you to do, might jeopardize your clearance more than being open and transparent about dealing with a mistake by walking away. Before you take E-man's advice on such an important matter, find out!

Hmmm... I heard something like what E-man said before, but not sure if it's possible or not since I never placed myself in that position. So, condohelp, you'd better check it out first before follow the advice. And, yes, it is shame to do that on financial purpose.

The basic rule here is,

- No one can change accurate facts in credit report.
- But it is perfectly legal to challenge something as inaccurate or incomplete.
- Your attorney will file a petition to remove inaccurate record, and will argue it is either inaccurate or resulted by change of situation.
- Resourceful attorney or an attorney who got lots of friends can set something up for you, because
- When they can't verify what happened by whom, they have to remove the record.

I guess attorny has few tricks, and in order it to work, it should be planned or at least monitored. Attorney can make differences though, beware of crooks that want your money. You need to find out yourself. Well, that's my thought.

Does anyone know how a died in lui will affect credit and again a security clearance??? Our CPA advised us to try and work something out with the bank versus simply foreclosing.

Condohelp,

http://usmilitary.about.com/bio/Rod-Powers-6341.htm

This guy has posted some info on getting clearances. As I figg'rd, honest and transparent financial dings on your record that are from honest mistakes don't look too serious. On the other hand, while a sham divorce is not explicity mentioned in his web site, the language on considerations for denying a clearance suggests that gaming the system with deliberate deception like the sham divorce that E-man advises you to do appears to be more serious.

Maybe you can track this guy down and hire him for an hour or so of consulting, ask him the "what if's".

You can read what he says about financial considerations here:

http://usmilitary.about.com/od/theorderlyroom/l/blsecfinance.htm

When I worked in defense, I didn't have a clearance, but I didn't need one for that job. Lots of folks in the department had them, so they could do more work. Someone else didn't have a clearance because the application was denied. It was a big Scarlet Letter"D" for that individual. Not having a clearance was not too bad because if the opportunity came I could always have it applied for. But having a denial was career suicide for that other person.

Like E-man said you can always make more money some time again in the future, but unlike E-man says it could be harder to earn back the reputation in defense industry if you're denied a clearance going with E-man's Advice of Gaming The System with a Sham Divorce.

Check out the information about this guy on his web site:

Condohelp says

Hi Troy,
I do think that renting may be our only option at this point, I just hope that it won’t be for years. I also worry that rents may fall, as they already have.
Thanks.

I don't think I can add too much that hasn't already been said.
I'd just point out a few things:
1. If you choose to rent out your place, I would recommend renting instead of buying another place. If you rent out your current place and buy another place, you are essentially making a bullish bet on the housing market. This is a mistake that many people are doing in a similar situation to you.
If prices come down further, you're doubly screwed, on your old condo and any new place you buy. However, if you rent a new place and prices come down, while you're screwed more on the condo, at least you're insulated with your rental. Likewise, if there's some magic fairy that brings us back to 2006 and you rent, you'll lose on the house your rent but will do well with the condo you are renting out/held onto.
2. I think you need to accept you are down 150k on the place; it is just whether you pay it down now (by selling) or later (by continuing to make the payments). If a realtor says 200k is the ceiling and it will take a year, he really means 150k. Since I am guessing you have at least 50k paid off, that means you'll have to shell out 100k out of pocket. Anyways, people lose 150k all the time in bad investments...it just kind of happens.
Any area outside of midtown Manhattan where 670 sq foot condos were going for $300k sounds insanely bubbly to me. Like, -70% type bubbly. Given it's not that far down, I do think you are in an area that could go down further, so my advice is to not rent out your place and buy a new place. Any new place you move into should be a rental.

Ptipking222 says

Condohelp says

Hi Troy,
I do think that renting may be our only option at this point, I just hope that it won’t be for years. I also worry that rents may fall, as they already have.
Thanks.

I don’t think I can add too much that hasn’t already been said.
I’d just point out a few things:
1. If you choose to rent out your place, I would recommend renting instead of buying another place. If you rent out your current place and buy another place, you are essentially making a bullish bet on the housing market. This is a mistake that many people are doing in a similar situation to you.
If prices come down further, you’re doubly screwed, on your old condo and any new place you buy. However, if you rent a new place and prices come down, while you’re screwed more on the condo, at least you’re insulated with your rental. Likewise, if there’s some magic fairy that brings us back to 2006 and you rent, you’ll lose on the house your rent but will do well with the condo you are renting out/held onto.
2. I think you need to accept you are down 150k on the place; it is just whether you pay it down now (by selling) or later (by continuing to make the payments). If a realtor says 200k is the ceiling and it will take a year, he really means 150k. Since I am guessing you have at least 50k paid off, that means you’ll have to shell out 100k out of pocket. Anyways, people lose 150k all the time in bad investments…it just kind of happens.
Any area outside of midtown Manhattan where 670 sq foot condos were going for $300k sounds insanely bubbly to me. Like, -70% type bubbly. Given it’s not that far down, I do think you are in an area that could go down further, so my advice is to not rent out your place and buy a new place. Any new place you move into should be a rental.

Thanks for te Advice! No we won't be buying for at least 5 years 1) because I am pretty sure we are going to do a deed in lieu of foreclosure which will negatively impact our credit score. 2) We also think home prices will decrease in that time. 3) We might be planning to move out of state and don't want to be tied down to a home. 4) We need to let the gross feeling of owning a home wash off before we ever do this again.

We don't have 50 grand paid off because we had an interest only loan until last year. We will lose over 150k if we wait a year to sell. Keeping the property and renting will cost us $18k a month according to our financial advisor and we can't write off a dime due to our income level. That's a lot of cash to lose for a god knows how long period of time!!

sybrib says

Condohelp,
http://usmilitary.about.com/bio/Rod-Powers-6341.htm
This guy has posted some info on getting clearances. As I figg’rd, honest and transparent financial dings on your record that are from honest mistakes don’t look too serious. On the other hand, while a sham divorce is not explicity mentioned in his web site, the language on considerations for denying a clearance suggests that gaming the system with deliberate deception like the sham divorce that E-man advises you to do appears to be more serious.
Maybe you can track this guy down and hire him for an hour or so of consulting, ask him the “what if’s”.
You can read what he says about financial considerations here:
http://usmilitary.about.com/od/theorderlyroom/l/blsecfinance.htm
When I worked in defense, I didn’t have a clearance, but I didn’t need one for that job. Lots of folks in the department had them, so they could do more work. Someone else didn’t have a clearance because the application was denied. It was a big Scarlet Letter”D” for that individual. Not having a clearance was not too bad because if the opportunity came I could always have it applied for. But having a denial was career suicide for that other person.
Like E-man said you can always make more money some time again in the future, but unlike E-man says it could be harder to earn back the reputation in defense industry if you’re denied a clearance going with E-man’s Advice of Gaming The System with a Sham Divorce.
Check out the information about this guy on his web site:

Hi E-man,

No we won't divorce!!! That's kind of silly. We plan to be upfront with the bank and let them know we are walking if they don't negotiate. My husband does not want to work in the military rather for the defense department at some point in the future. Anyway he hasn't decided on this firmly yet and is still happily working at his current job.

We will probably need an RE attorney though.

Also, does anyone know if "you walk away" is a good service to go with or are we better off getting an attorney or doing it on our own? As far as the deed in lieu goes. However, if we can't get the bank to work with us we will foreclose.

Just keep in mind that if you refinance, you will not be able to simply walk away - ever.

You know that I am in a similar situation and we are walking away in 3-4 months (prices will likely be down then and we plan to buy a home, then foreclose)