So, the home is not worth what you paid for it. You are going to lose your downpayment and then some. Can the bank come after you for any difference between your purchase price and what you try to sell it for? I understand they cannot sue for the difference. Does that mean they cannot garnish wages, freeze bank accounts, etc? Any authoritative answers?
2006-07-27 17:00:51 · 10 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
They can go after you for whatever you owe. Garnish, etc., whatever ways are available to them.
They loaned you money. You owe that much money, regardless of whether you lost money on the property. Why should it be their fault that you made a bad investment decision?
2006-07-27 17:05:01 · answer #1 · answered by lily 4 · 0⤊ 0⤋
The first part of your question was what happens if I walked away from the property indicating that you would abandon the property. If you decide to do this and not make an additional payments on the house, the bank will eventually foreclose on the property, kick you out and try to sell the property for what is owed plus any money they spent going through foreclosure and any associated fees.
If they fail to sell the property through a trustee sale the bank then take the property back, it is then considered Real Estate on Hand (REO). They will then assign the property to a real estate firm they do business with to sell on their behalf.
If this take place they can not do anything to your wages or any other funds you might have, the instrument they took as collateral was the house.
Your credit report will reflect that you have been foreclosed on and will not look good on your credit report.
If you don't want the house you can prevent the foreclosure procedure by calling the bank and doing one of the following:
1. Deed-In-Lieu of Foreclosure
Give them back the house with a deed-in-lieu of foreclosure.
Most will agree to this as it saves them the money and time of going through the foreclosure procedure. It will also be placed as a negative on your credit report.
2. Ask for a short sale.
This is where you are allowed to sell the property at a cost that is agreeable to both you and the lender. Once the sale has been conducted, it takes your name of the mortgage note. If you don't understand how to do this or have a friend that can hold your hand while doing it, your best bet is to do #1.
These two methods will also relieve you of any financial responsibility to the lender.
You will lose your down payment as well as other related monies you spent to get the house, but the interest, any ponits and and some fees are deductable on your income tax. what ever fees and points you did not deduct can now all be deducted on your next income tax. See Schedule "A" under interest, just below that about 2 lines down are points and other fees paid. Check with your tax advisor about the tax advantage on your property.
Under certain conditions there might be a tax liability for the sale of your house.
Count any money lost as rent that you would have had to pay any way to some one.
Please check with your tax preparer or advisor for any tax advice.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2006-07-27 17:55:36 · answer #2 · answered by Skip 6 · 0⤊ 0⤋
As Skip pointed out, a short sale is your best option. However, to do this, you will need an all cash buyer. If you're in Southern California, let me know and I will explain the process with you and help you out. I do short sales and I pay cash for homes.
Another option, if the monthly mortgage payments are about the same as the rental rates, is called a PACT trust. You basically stay on the mortgage for a few years while the tennant pays your mortgage and then buys the property at a later time. It's safer than a lease purchase option and you won't get 1099ed.
Regards
2006-07-28 04:07:57 · answer #3 · answered by Anonymous · 0⤊ 0⤋
I'd talk to a real estate attorney to gain knowledge and clout, then someone in authority at the bank and try to negociate. The bank doesn't want to get stuck with your property. They'll write a note on it and sell it to someone like me for a song. If you can prove fraud, you might be able to sue the seller.
2006-07-27 17:14:04 · answer #4 · answered by elge13 3 · 0⤊ 0⤋
If you sell your house for LESS than what you owe the mortgage company, you have to pay the difference. The mortg. co will NOT release your financial responsibility if the loan isn't paid in full.
If it's your primary residence, I say just stay there until it appreciates or make some cosmetic changes to raise the value.
2006-07-27 17:11:17 · answer #5 · answered by ModelBehavior 2 · 0⤊ 0⤋
They can come after you for the difference.
2006-07-27 17:04:24 · answer #6 · answered by gnomes31 5 · 0⤊ 0⤋
you get wark lest you star steeling from people
2006-07-27 17:07:30 · answer #7 · answered by kimarley r 2 · 0⤊ 0⤋
you live under a bridge
2006-07-27 17:03:12 · answer #8 · answered by jyd9999 6 · 0⤊ 0⤋
You might as well declare bankruptcy as well.
2006-07-28 07:22:45 · answer #9 · answered by HMMMMMM 3 · 0⤊ 0⤋
You will rot...eventually.
2006-07-27 17:04:46 · answer #10 · answered by J.R. 4 · 0⤊ 0⤋