Fortunately for me, I put in an offer on a short sale in early January and it looks like the bank is going to approve of it, I will be buying it at over 40% off with all cash. I got on Dave's program about 8 years ago. You will be here too if you listen and follow through. I even bought a beater and delivered pizzas for awhile. Best Wishes!

Randy March 18 2010 2:25 PM

Our home is underwater and we have a second. We already short saled the rental and in CA the taxes will get us. We worked overtime to pay bills and put now we owe the IRS $10,000 due to all the over time. Student loan, IRS, Credit card debt of $20,000 and forclosure on our timeshare, our credit is pretty bad. We are not sure to file bankruptcy, not pay the mortgage and pay down debt, or just move. We are so torn and we are seeking God for guidance, but we need some direction. Please help

Crystal March 13 2010 4:35 PM

Like James I too paid $189,00 for my home in 2006 and now simalar homes in my neighborhood are going for around $100k. My assesed Florida property tax has valued my home at $105k. I have a 30year fixed mortgage and was laid off last summer forcing me to find a job which pays less than what I was making. Please note I have attended Financial Peace University and was making great strides in reducing my debt and getting my finances under control until I was laid off. Here is my question. I contacted my lender and reached out to all of my creditors and made the four wall a priority until I could get my pay to a level where I could breath a little bit. In July of last year my lender put me in a "loan modification" program and advised I pay half of my normal monthly payments. I did and paid them every month as they advised until I was approved for the new modification. It turned out to be a joke. They recently sent me a letter saying I didn't qualify for the Federal Loan Modification program. Instead I got a "Home Saver Advance" agreement that basically says I need to resume my previous monthly payments (as before the modification program) and on top of that they are taking my delinquent payments (from the modification period) and applying 4.61% interest to that for a total of $16,411 which I can pay $95.00 a month in addition to my regular monthly payments!This would put my recommended housing percentage aroung 65% way above the 25-35% Dave Ramsey advises. Should I sell? Will a short sale help? What happens when I am underwater like this? What will my lender do/say? I can pay this monthly "nut" but there is not much left to knock out any debt.

Joe March 13 2010 8:34 AM

Paid $170,000 for our home in 2006. We met with a realtor last week who said we could get $100,000 for it. Depressing!

James March 08 2010 7:59 PM

To Elizabeth with the short sale question: Whether or not you will owe money to the bank after you short sell your house will depend on what kind of loan you have, where you live (state laws often allow or disallow this) and whether you can get the bank to agree to a short sale without penalty. An attorney who deals with mortgages/real estate can help you with all of these questions, probably better than an inexperienced real estate agent can. Your bank/ mortgage servicer is probably not willing to talk to you at this point because you are making payments on time and your loan is not in default. Usually the bank will not want agree to a short sale until you go into default, HOWEVER, defaulting on a mortgage will hurt your credit score, so you should definitely discuss approaches to obtaining a short sale pre-default with an attorney. If you do decide that a default will be beneficial because it will save time/ get the bank to work with you, you can continue making payments but put them in a separate account to be applied to your debt later. I understand the potential ethical issues with not paying money as you've promised, but bankrolling your payments allows you to turn them over after you've worked out an agreement. Your church advisor probably can offer wonderful spiritual advice, but sounds like the last person you should be talking to about real estate finance. You are in over your head right now, and need to take action. The longer you wait, the greater your chances of foreclosure become. It is much better to begin working this out with your bank and an attorney as soon as possible so you can offload this debt and move on with your life. Good luck!

AJWR February 14 2010 7:00 PM

I have been reading some comments here and elsewhere, and I'm getting the impression that doing a short sale may still leave me owing money, to whom I can't figure out... If I have an FHA loan, house-poor & under water, Autism-Spectrum, on disability, and have trouble making good financial decisions, where on earth do I go for help? Some people at church are trying to help me sort through things, and short-sale seems to be only option, as renting it won't cover costs, but I live in a small town, potential agent is not experienced in short sales. I'm getting conflicting info, & worried sick, as I read that short sells have a high failure rate (foreclosed anyway) and need to be managed by experienced handlers for the best chance of success. I also heard a newscast in which Dave told a gal in Detroit to do a short sale, and, I'm pretty sure, NOT to pay her mortgage but to bank her payments, and said the bank would not agree to a short-sale on a mortgage that was current. Tried to confirm but broadcast was cut short on website. My adviser through Church thinks that would violate Biblical principles, and that I need to continue making payments... ??? Any suggestions for where to go for detailed info and/or help re. short-sale, or ideas on how a short sale involves carry-over debt? Keep up w/ payments or not? Thanks!

Elizabeth January 14 2010 10:47 AM

Pam, if you want earnings on your money you are going to have to accept some risk. That said, I think you can still get 1.5% through online CDs. If you won't be needing some of the money for 5 years or so, you might accept some fluctuation in the market. People who say they lost 50% of their retirement account are just counting play money. They are counting paper gains or losses like they were real. If you keep what you need now in a cash account, and invest the rest in offshore and domestic mutual funds, you should see some decent returns. Just be willing to wait a year for your money if the market turns down. Budget your investment withdrawals just like anything else. If you won't need that last $10,000 until you are 80, it should be in a long term investment, not in cash.

Larry Caldwell January 13 2010 12:18 PM

I am selling my house. Where do you put a large amount of money, $100,000. I'm 62yrs, no hi risk and CDs pay nothing. I have no debt, just want the money to be safe and make some interest. Don't need money for a year.

Pam January 07 2010 12:37 PM

In respect to Nick, he has raised some very good points. No, I don't agree that the American Dream is a house of cards. But I DO feel that there is some un-realistic optimism in the tone of some of these articles. I used one of Dave's ELP's to sell my house at the best price we could get in Ohio- and still had to eat 15,000 dollars in cash. Thank Goodness for a hefty emergency fund! I didn't miss a single payment, didn't short sell; bought at a price well within my means; and honorably paid off my debt....and still got burned. I am now firmly convinced that ALL mortagages are foolish, and those that have said "Renting is throwing your money away" are flat wrong. I'd rather rent for the rest of my life than have another mortgage anchor around my neck ever again. Greed on the part of banks and irresponsible consumers, (encouraged by the government)got us into this mess. We WILL all emerge the wiser, I do believe....if not slightly more bitter. Take care, all.

Daniel December 26 2009 3:15 PM

my husband and i are in a similar situation as nick. i wonder if renting our house out is a good move? i do not like taking risks. renting our house out seems risky to me. what do you all think?

cm December 17 2009 2:49 PM

I want to encourage those who are struggling right now to stick with it! We as christians have the priviledge to invest into the economy by just merely being true to the vows and our word. Which may mean we have to get creative, get a second job, start a business, stop spending, adjuist our lifestlyes and just be aware of needs, wants and desires! Live on less!I have purposed to keep the perspective that I am a steward of the Lords stuff. When I feel the urgency to act on my own best thinking.... the WARNING light turns on, reminding me to seek the Lord and his counsel on what to do. I am thankful for the grace God shows when we have gotten ourselves finacially stuck, so at the risk of sounding churchy, I urge us all to stay the course and learn how the Lord would have each of us steward our current finacial economy. Obedience and sacarfice will be key demands from us during the journey. He gives and takes away because He owns it all and We are not alone! Remember we are his children and He is desiring, ready and able to help. Fight the good fight be faithful to God and his principles and His solutions for you will be on time; Don't jump ship, be faithful Stewards!

kelly December 01 2009 8:14 AM

Nick, The American Dream is not a scam, nor is it a house of cards that has fallen..That is a liberal myth and victim mentality. The American Dream is being corrupted by this "We Love Debt cause if we can't pay it someone will bail us out" culture... Personal Accountability and Responsibility has been thrown out the window and it's affecting those of us who tried to do the right thing.. But now we're gonna place blame on the banks instead of those actually at fault?? Hey if you don't want the bank making a profit..don't do business with them.. If you think they are corrupt...don't do business with them... Don't blame Dave for telling us the TRUTH.. We got ourselves into all this mess..and now we are begging Washington to save us?? NO WAY... I'm gonna stick with Dave's Plan.

Joshua October 27 2009 12:37 PM

Yes, I understand, I'm just frustrated when I see the banks are making profits now and very little trickled down to the actual consumers. It's hard to know that if want to pursue a new job opening (in another state) that I would have to short sell at best. The American dream to me seems to have been a scam or a house of cards that collapsed. My wife has stated that she never wants to own again. Mind you we don't even have the $12K we put down on our first home in 90. Should have rented all those years. My father had it right, only buy in cash. Currently the only bill we have outstanding is our mortgage payment. With that said, yes my wife and I have learned our lesson. Taking a cue from from relatives in Europe or as they say "Why do you people in states buy so much stuff??" They enjoy life! 1.) Bigger homes = more stress 2.) Don't buy - Like was stated unless you plan to be there for the rest of your life 3.) Homes lose value like cars (I know, I work in automotive and I never buy a new car 4.)Don't trust banks 5.)Unfretted capitalism will eventually let the greedy people of the world make a ruin of things Now I'm going out to enjoy a Fall day!

Nick October 16 2009 7:28 AM

I hear you....We are doing a short sale. It stinks but it's the best thing for us that we can think of. We are into our home almost $200,000 more than it's worth. It was at all not like that when we bought. We are just going to suck it up and rent and save. What's a better option?

Carrie October 15 2009 3:50 PM

I am beginning to think renting makes more sense than buying, especially if one lives in a crime ridden city like Memphis. We bought our current home in 2002 for about $126,000. We put on a new roof, and replaced some worn out appliances over the years and therefore have easily dropped another $10,000 into it. Bottom line, I would sell it for what we paid for it 7 years ago. Houses have gotten hard to sell. Bankers are insisting on 20% down, and most Realtors tell me that most prospective buyers can't even come up with a 3% down payment. (we put down 20%).

Rex October 15 2009 3:45 PM

Alfred, your comments on Nicks choice to buy a home are right on the money! (no pun intended) I feel for anyone who finds themselves in a similar situation. Thank you Alfred for serving our great country. Your positive attitude serves you well and inspires me.

Tamara October 15 2009 12:37 PM

I feel for you Nick. It really hurts to know the investment you made in your house has currently lost a lot of its value. However, unless you really need to move right now, don't fret. Like Dave says the market will eventually recover. It may take a few more years, but it will get better. And it may be worth it to rent your house out for a few years while the market recovers instead of selling it if you do need to move for some reason.

Gretchen October 15 2009 8:30 AM

Nick, I feel your frustration with the generic-sounding optimism from the article, but remember that there is a strong element of personal responsibility when you decided to purchase a house. You had the option of mitigating some of that risk by taking out a 15 year mortgage so that you could have started paying off significant amounts of principal right from the beginning of the loan. Also, market uncertainty is one of the reasons that you don't buy a house if you are not going to be stay there for at least five years. I am in the military, and while I would love to buy a house right now at these bargain prices, I am renting because I know I can't stay at any place for more than five years. Finally, remember that when you are buying a house with credit, you are taking a risk, and, in your case (even with the 20% down), that risk didn't pay off. Remember Ecclesiastes Chapter 9 verse 11: "the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all." Bad luck still affects everyone in the short term, but you can overcome difficulties if you are thinking and planning for the long term. Hang in their brother and stay positive, and you will be bless for it in the end.

Alfred October 15 2009 4:56 AM

Nothing is said here about owners who brought homes during the peak and lost ALL their equity (plus my 20% down) on their house. I can pay the mortgage still but if wanted to move now I would have to sell at below my remaining mortgage. Hello Chase, here are the keys to my house...

Nick October 13 2009 12:49 PM