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Around six months ago I moved out of Las Vegas in order stay employed. At the time I could not sell my home in Vegas because I was underwater on the mortgage so I decided to rent it out, but for far less than my mortgage payment.
I figured I could carry it for this year and pray for the market to turn around. Six months in, it appears to still be very grim and there is little hope that I will be able to ride this out.
I do not want to disrupt the tenant currently living in my home so when her lease is up on it in six months I am going to put the house on the market and hope Wells Fargo will agree to a short sale. I will hire a real estate lawyer to walk me through.
My problem is that I live on the other side of the country. Has anyone on this board done a short sale while living far away? What are your experiences? Also, does anyone know if I need to hire a NV attorney or NJ attorney which is where I currently live? Lastly, for anyone on here who did a short sale... how horrible was the experience and how bad did it wreck your credit? Did the bank agree to forego the balance or come after you? Any insight would be helpful.
I feel horrible that I am in this position. I tried everything to do the right thing, but I need to face the situation and deal with it. I would consider asking for a loan modification, but I am not currently behind and am worried I would not qualify because I am not currently living in the property.
Sorry to hear about your situation, but it's good to hear you were able to find employment elsewhere. It sounds like you're truly a victim of the economic slump.
Without knowing your whole financial situation, I would assume that you're a prime candidate for a short sale since you had to relocate for employment.
Do you have just a first on the home or do you have a second as well? If you do have just a first loan and it is with Wells Fargo then you're in a good position. Wells is known for being one of the easiest and quickest lenders to get a short sale approved through. A friend of mine had a short sale approved and completed with them in about three months. Also the first loans are not likely to come after you for the balance due. If you have a second that complicates things, but still not impossible. Usually the 2nd will ask for you to bring cash to the table or take a note back for some portion of the unpaid balance, but every deal varies.
If you choose to use a RE attorney or whatever agent you want to use, I would contact them 2 months prior to your tenant leaving so you can find out everything you'll need to prepare for your short sale package. (bank statements, tax returns, hardship letter, etc.). Google for "wells fargo short sale package" and there should be lots of info out there regarding what you will need to provide.
The thing I'm not sure of is if the bank will approve a short sale for you if your income allows you to carry the home along with whatever your costs of living are in your new locale and/or if you have any type of savings. My friend who did the short sale through Wells said they didn't even ask him for bank statements, so who knows. Your RE attorney or agent should be able to help you with this info.
Around six months ago I moved out of Las Vegas in order stay employed. At the time I could not sell my home in Vegas because I was underwater on the mortgage so I decided to rent it out, but for far less than my mortgage payment.
I figured I could carry it for this year and pray for the market to turn around. Six months in, it appears to still be very grim and there is little hope that I will be able to ride this out.
I do not want to disrupt the tenant currently living in my home so when her lease is up on it in six months I am going to put the house on the market and hope Wells Fargo will agree to a short sale. I will hire a real estate lawyer to walk me through.
My problem is that I live on the other side of the country. Has anyone on this board done a short sale while living far away? What are your experiences? Also, does anyone know if I need to hire a NV attorney or NJ attorney which is where I currently live? Lastly, for anyone on here who did a short sale... how horrible was the experience and how bad did it wreck your credit? Did the bank agree to forego the balance or come after you? Any insight would be helpful.
I feel horrible that I am in this position. I tried everything to do the right thing, but I need to face the situation and deal with it. I would consider asking for a loan modification, but I am not currently behind and am worried I would not qualify because I am not currently living in the property.
You asked about how a short sale will effect your credit, the rules keep changing all the time, For now if you do a short sale it can take 3 years before you will be able to get a loan.
When you decide to purchase a property again the bank will scrutinize why you did a short sale or foreclosure when they are looking at whether to give you a home loan on your next home . The bank will ask for proof why you short sold your property and if it looks like you could've made the payments and walked away because you were upside down then you may either be turned down or end up paying a higher interest rate.
The rules for sellers credit and ability to purchase another home that have either short sold their home or had a foreclosure will determine not only their credit rating but also getting a home loan in the future. This is due to so many home owners walking away for one reason or another the banks are trying to recover their loss's, at the same time with so many walk away they have to figure a way to keep buyers in the market.
However the rules keep changing so if and when you want to purchase a home again after default on a mortgage maybe different again.
The real-estate attorney will guide you through the short sale process, you definitely want to use a Nevada real-estate attorney. Good luck it's not a short process be prepared as it is time consuming, depending on the properties location and how it's priced so that the bank and the buyer can come to an agreement along with what your willing to do, will determine how long it will take for the property to sell.
I just wanted to take a second and update this thread by enlighting you all on my situation. Its been two years since I moved away from Las Vegas and about one year since I firmly decided to short sale my home there. I have not been back to Las Vegas. I have been handling all of this BS from out of state.
I hired my lawyer one year ago and stopped paying my mortgage right away. I stopped paying under direction from my attorney. He said it would "grease the wheels with the bank". I had a renter in the house and she actually lost her job and stopped paying the rent right around the same time I stopped paying on the mortgage. Sort of a strange karma thing.... I never gained anything like some people do by having a renter in the home while not paying the mortgage.
I felt bad and let her stay for a while but finally had to evict her and the kids because she was not cooperating with the agents trying to show the place. She would not let the real estate agents into my house. It went against the conditions of the lease, and since she was not paying anyway, I threw her out. In the end, she ended up trashing my home. The judge who enforced the eviction granted her an extra 30 days to get her stuff together. She spent those thirty days f'ing up my house. She smeared feces all over the walls, ruined the carpets, dumped paint all over the back yard. She really acted like a pig. I had my property manager, who ended up being a real deadbeat too, clean up the house. The property manager was and still is so slow getting back to me, that I have to have my friends in Vegas drive by and stop into the home to see what is really going on. Its been so backwards, the entire thing. I still realize that I am just as bad as all of these people... Im the guy not paying the mortgage. I get that I am part of this entire problem. Still, Ive tired to handle this responsibly.
Since the time I hired the law firm to sell the property, I have had two offers. Both were for bargin basement prices, but the firm pushed the offers over to the bank in hopes of a bite. The first offer was pulled back from the buyer after a few months of back and forth with the bank. The second offer came in just after that, but the bank now seems to lose the paperwork over and over again. The attorney cannot get them to set the "file" up so that they can look at the offer.
This week I received notice that the property will be auctioned later in the month. Looks like the last twelve months of lawyers, talks of short sales, and agents showing the property under the dark glare of an angry tenant will be a complete waste of time. The home is in foreclosure, just as it was when I bought it. My mother warned me that sweeping up a house in foreclosure was bad karma.... I didnt listen.
I am just glad that at some point soon I will be free from the property. I hope it goes to auction and I hope that an investor picks it up for 30 grand. Good for him. Hopefully he or she will make it a nice home again. Just like it was when I first moved in. I spent hours and hours painting, putting in new carpet, fixing the plumbing.... So sad that it got trashed, but at the end of the day it was my fault. I chose to leave town instead of staying and working three jobs to pay for a home that will never earn me a dime. What should I have done... Im still not sure.
I cannot believe how long and messed up the entire foreclosure/short sale process has been. All I want is for it to get resolved and over with, but is just drags on for months and months.
For anyone else out there in the same situation... I would say this. Dont try to rent and hang onto the property in hopes that the market will turn. Its likely the market will never turn and chances are your renter is going to be a pig and trash your house. You will hire a property manager who is stressed out with a bunch of other distressed properties and will not care when your home gets wrecked.
My best advice is to just walk away. I wish I would have done that two years ago, but instead I spent two years trying to do the right thing... "hang on and rent the place" "wait for the market to turn".. "do a short sale".. I now say F'it. Send the keys to the bank and walk. Its not worth the stress.
So when the bank sells the house, you will have a deficiency judgment against you, the bank will know who you are employed by and try to collect and then uncle Sam gets into the picture because it was an investment propery.. You are going to be liable for the tax which may put you into bankruptcy. Did you think that far?
So when the bank sells the house, you will have a deficiency judgment against you, the bank will know who you are employed by and try to collect and then uncle Sam gets into the picture because it was an investment propery.. You are going to be liable for the tax which may put you into bankruptcy. Did you think that far?
It would be extremely difficult for the bank to collect after foreclosure on a first mortgage since they only have six months to do it and it requires court action. A second on the other hand, you can be pretty sure they would/will come after him eventually.
Just because he was renting it out for a period of time doesn't make it an investment property in the IRS eyes. As long as he lived in it two of the last five years (sounds like he did), it will be considered a primary and no tax due.
Sounds like a truly bad run of luck, especially with the bad tenant and all. If a buyer at a auction gets it, they will likely get screwed (that is part of the business though) since they will likely set their bid price based upon the condition of the house in the last MLS listing. Unless it trashed out front, then they'll assume it's trashed inside. Paint in the backyard might be enough to tip them off that it's trashed inside.
Quote:
Originally Posted by airics
So when the bank sells the house, you will have a deficiency judgment against you, the bank will know who you are employed by and try to collect and then uncle Sam gets into the picture because it was an investment propery.. You are going to be liable for the tax which may put you into bankruptcy. Did you think that far?
Sounds like a truly bad run of luck, especially with the bad tenant and all.
No, I think getting a bad tenant is "normal" luck. It's extremely good luck to get a more-or-less decent tenant in this town. I've had to pick up after dozens of bad tenants -- people who trashed my relative's rental properties just because they could.
The do-nothing property manager also is par for the course. Good luck finding one that will anything more than deposit checks. Or lift anything heavier than money.
It goes to show that if you want a job done right in this town -- do it yourself.
No, I think getting a bad tenant is "normal" luck. It's extremely good luck to get a more-or-less decent tenant in this town. I've had to pick up after dozens of bad tenants -- people who trashed my relative's rental properties just because they could.
The do-nothing property manager also is par for the course. Good luck finding one that will anything more than deposit checks. Or lift anything heavier than money.
It goes to show that if you want a job done right in this town -- do it yourself.
I would hate to have one rental property in Vegas. The OP was correct in that he should have just mailed the keys back to the bank when he first moved and saved himself a lot of aggravation in "trying to do the right thing."
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