I am married (although the house is only in my name), and I have a second mortgage. I am just going to foreclose on my home because we got into a risky mortgage that we totally cannot afford and payments are skyrocketing.
As a result, we are living check to check, barely getting by and the principal balance is growing exponentially. Luckily, the house is only in my name and I have a second mortgage as well. I am considering the following steps:
1. Find a more affordable home (to rent) and sign a lease
2. Skip my mortagage payments for a couple months to save money (which we are currently unable to do).
3. Leave the home I am in and allow it foreclose
4. Rebuild and improve my credit and build cash reserves over the next 3 years.
2007-10-06 13:04:27 · 8 answers · asked by Mr Green 1 in Business & Finance ➔ Credit
Depending on which state and which lender you have, Yes the likelihood that they will put a lien on a new dwelling you purchase in the future is reasonable to assume.
You are riding a boat that you are not alone in and in many cities across this country you are going to be in competition for these rentals out there and rents are going up faster due to the recent supply and demand issues....
You need to save all the money that you can right now, you will need more money as security based on your poor credit and you may be at the bottom of the totum pole for anyone wanting to rent to you and you will be forced into renting(leasing) a dwelling with higher rent.
I heard and I don't know if it is true some lenders will 1099 you at the end of the year all of the money that they did not recoup so you will have to pay taxes to the IRS on that lost money.
2007-10-06 13:19:34 · answer #1 · answered by raycat97 4 · 0⤊ 0⤋
I am very sorry for the predicament you are in.
Depending on how much it is, yes, they will sue for the diff.
Can you try to refinance somewhere? What about the second mtg holder? Call up your lender and talk to them about it. Rates just went down last month and will probably go down the end of this month too.
I don't know how bad off you are, but I would not sign a lease until you know what is happening with your house. Why get locked into even more obligation?
Call the mortgage holder and tell them you want to work with them.
how about getting a second job? or putting your house up for sale. Unless you live in Michigan, because there just aren't any here and there is a glut of houses for sale.
good luck.
2007-10-06 13:18:03 · answer #2 · answered by glendiva1968 3 · 0⤊ 0⤋
Try refinancing with HUD loan, I doubt if you'll be able to
sell your home and pay off the both mortgages, you could
conuslt a lawyer and see what would happen if you filed
bankruptcy instead of foreclosing. A Contract Lawyer
might be more beneficial than a Real Estate Lawyer
He might find "something" hidden in the fine print to
your advantage.
2007-10-06 14:30:36 · answer #3 · answered by Anonymous · 0⤊ 0⤋
DON'T FORECLOSE!!!
You need to do some local market research. Find out if the houses in your area are selling or if it is a rentable market. If they are selling, sell your house. If it is a rentable market, put an ad in the newspaper tomorrow for a roomate or rental property. If you are next to a college, the fall semester will be over soon and students will be looking to move off campus. If you are near a major employer, employees may need a place to live.
If you can't sell or rent, contact your local REO Realtor, these are the realtors who sell bank owned properties. Find out if they have a list of local investors who are willing to buy your property and rent it to you. Then you won't have to move. But be smart about this, if the property is only in your name and the mortgages are in your name then have your wife call using her maiden name.
Finally, find out how much equity is in your home, ( by the sound of your predicament, not much) and try to do an upgrade or two and then get an appraisal done.
THIS IS AN INVESTOR SECRET: You can get estimates for work to be done in your home (written), call the appraiser and tell him the work has been done, asking for a new valuation on your home. Call the tax office and get them to raise the valuation on your home, (this provides instant equity).The more equity, the less you owe, the more you can remove to pay your bills.
Example: $140000 Home gets $20000 worth work. Value goes up to $275000. You pull out $50000, get the work done and have $30000 left to pay your mortgage with tax free.
But you have to call the contractors and get them to start on the work, immediately.
2007-10-06 13:26:59 · answer #4 · answered by Anonymous · 0⤊ 1⤋
Yup.......by the way.....you can not forclose on your house. The lender will.
I would want to be in control. If you let them sell the property, the will sell and it might not be to the highest bidder.
You try to sell and work out a deal with the lender. I think there are now programs for folks like you that were stupid enough to buy a house they could not afford with sub=prime mortgages. Might look around
2007-10-06 13:13:05 · answer #5 · answered by Bob W 5 · 0⤊ 0⤋
Sounds like it might be your only real option. It will take more than 3 years to rebuild your credit.
They probably won't sue you for the balance, although they could. It will most likely be taxable income to you though.
2007-10-06 14:30:52 · answer #6 · answered by Judy 7 · 0⤊ 0⤋
Yep, they will take you to court to get that difference. No doubt about it.
2007-10-06 13:09:51 · answer #7 · answered by Joy L 4 · 0⤊ 0⤋
very possible , yes
2007-10-06 13:07:24 · answer #8 · answered by yowuzup 5 · 0⤊ 0⤋