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I and my wife own a home in MS but have moved for work to AL. We have already purchased another home here and have been trying to sell the one in MS with no luck. We are considering ceasing our payments on the home in MS and heading toward foreclosure or deed-in-lieu. We both have good credit currently- last I looked my score was around 790 and I think hers was similar. We currently have 1 car note through a credit union. We also have a few thousand dollars on a credit card at no interest. We have enough cash on hand that we could easily pay the credit card off. So any change in our credit card terms (cancellation, interest rate hike, etc.) on any of our 4 credit cards (2 MC, 1 Visa, 1 Discover) wouldn't be too big of a deal as we wouldn't have any balances. But would a foreclosure on that house have any effect on our mortgage on the house in which we're currently living? The house in MS is a conventional and this one in AL is FHA. The car note also isn't a big deal as we also have enough cash on hand that we could go ahead and pay it off. Also of consideration is that we may be looking to adopt a child a year or 2 from now and not sure if the foreclosure on our credit would have any effect on that. Also, could the lender get a deficiency judgment against us on the foreclosure? I've read that MS doesn't allow deficiency judgments but have also read that this only applies if the home is the current primary residence- which it obviously no longer is. We paid 250K for home in June 06 and then put about 50K of improvements into it. Currently owe about 227K. Have it priced currently just under 200K. If we could get a buyer at or near 200K we could swing making the difference between the balance and the sales price (as well as realtor fees, etc.) but if we had to sell it for much less we're going to be up a creek. We could rent it if we opted to take it off the market but the rental revenue would be less than half of our monthly expenses based on the current rental market. Also of consideration is that my wife’s job came with a relocation package so if we sell the house before September of 2011 we will get reimbursed for a good chunk of the realtor’s 6%. Also not sure if we should have any concern about the credit hit having any effect on our jobs. We both currently work for the federal government. Looking for advice.
If you foreclose on this home, it will have no impact on your current mortgage. Those terms are already set in stone. A foreclosure will have a large impact on your credit and some employers will run your credit before you are hired but seeing how you work for the federal governmen, i doubt it would have an impact on your job. It could impact you adopting a child. Not sure, but i would think adoption agencies look at your credit to see if you are stable and able to make your debt obligation payments. I would highly recommend before you make the choice to go into foreclosure that you consult someone familiar with adoptions.
You should be contacting the lender that holds the mortgage on your other property. See if they will accept a short sale.
If you could get a buyer at $225k that would even be better.
If the house is only worth $175k then it will never ever sell.
The only buyer that you will "get" is one who is willing to pay what
it is worth. There is nothing in the post describing that salient fact.
Thanks for that helpful reply mort
If I could "get" a buyer for $400K that would EVEN BETTER wouldn't it??
If I price it at 65K and I "get" a buyer the next day does that mean it was worth 65K???
FYI, I had a contract for 206K in June that fell through due to inability of buyer to qualify for financing. At that time it appraised for 208K, whatever that's worth.
Any post saying "if I could get ..." doesn't sound like the seller is
being realistic. It happens all the time. Ask anyone. Apparently,
you now realize this or you wouldn't have just posted that.
Quote:
Originally Posted by gwadusm
... June ... At that time it appraised for 208K,
whatever that's worth.
It's certainly worth something.
Lots and lots of people post stuff on this forum saying that they need this or that they want that and that other houses are listing
for something higher, but that is all irrelevant. Your original post had
that kind of verbage and if I didn't point it out, someone else would.
Having the 6% realtor fees paid for by the moving package is worth a lot,
but the realitiy is that the house will sell for what it is worth and that is all.
The appraisal won't be worth anything if a similar house down
the street just sold for $175k. Your competition is the comps
of recently sold properties and not listed ones.
Quote:
Originally Posted by gwadusm
Is that enough paragraph breaks for ya mort??
Yes, thanks. That's much easier to read.
The first post was a giant run-on.
If you foreclose on this home, it will have no impact on your current mortgage. Those terms are already set in stone.
Yes and no. If you foreclose on this home, it will have no impact on your Principal and Interest. It may, however, increase your insurance rates, since they do base those, in part, on your credit score, which in turn would increase your monthly payment.
I do believe that the Federal government wouldn't be too happy about you defaulting on the mortgage, especially if you don't have a compelling reason (like illness, job loss, etc.). There are the ethics rules, and the requirement that Feds be responsible about their finances. If you have security clearances, you might lose them - and, if your positions require the clearances, you would lose the jobs.
You may not want to do this, but what about renting out your house?
Yeah. That's a good way of losing your money one month
at a time rather than all at once. The beauty of it is that
one has an opportunity to lose even more money than
they would have had they just taken their lumps up front.
There is the additional headache of going into the landlord
business without any knowledge of the business or time to
devote to it. This "fun" is padded by worrying about whether
the tenents will trash the place - causing you to have to spend
even more money repairing stuff that is perfectly functional now.
There are very few markets out there where rental income
comes even remotely close to covering the carrying costs
of a property for a single family home.
For a $200k home, if you are not getting $2,000/month in rent,
a "rental property" is a money pit. In most places, a $200k
home rents for far less - maybe less than $1,000.
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