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Old 09-28-2008, 11:25 PM
jco jco started this thread
 
Location: Austin
2,106 posts, read 4,629,031 times
Reputation: 1332

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We own a home in AZ and a home in TX, where we live. We've rented the AZ house for $200 less than our mortgage payment because it won't sell right now. We want to keep it and pay the mortgage simply because we signed paperwork that said we would, and we want to keep our promises. We also put 45k down on the house, all of which we've lost in equity and then about 5-10k from what I know about the market right now. The first renters called one day and said that they couldn't pay the rent anymore, so we should find new ones. Lovely. We found new renters. They've paid late every single month, and it's turned out to be two weeks late for the last two months. I know they're in sales, and they must be financially hurting. We don't have the money to pay two mortgages, and I feel like I'm just waiting for them to ditch their two year lease and run off. We're doing all we can to pinch pennies and save up. I'm wondering, though, what would happen if we just couldn't pay the mortgage on our rental and it was foreclosed upon? Would we lose the home we live in now, too?
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Old 09-29-2008, 11:18 AM
 
Location: Fort Myers, FL
1,286 posts, read 1,957,071 times
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no you wouldn't lose the home your in now. but what can happen is they foreclose on you and then attach a lien on your current home for the difference they lose from sale and attorneys fee's.

one option is deed in lieu. instead of making late payments. i don't know what your state laws are, but here in florida if a person makes a 2nd late payment you just file for eviction and the sheriff has them out in 14 days.


i hope you have a CPA taking full deductions for you, also.
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Old 09-30-2008, 09:15 AM
 
15,706 posts, read 21,190,146 times
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Can't you refi? i know they only do that for primary homes...if I right about that.

You stated you will lose out the down payment, equity as you stated....but if you foreclose what about the money of others that you got for your mortgage...Most people only talk about what they will lose...and I don't want to sound to harsh and I know you try to do the right thing by renting it out.

I have more than one home and have good renters and I'm aware that anytiem they can fail to pay due to what is going on, but in todays market many more people need to rent and so the rentls prices in my area went up. So I raised the rental price when I got a new renter last December and if they move out I will raise the amount again. This is business and IMO the markets will solve them self. People who couldn't afford the homes shouldn't have bought them, and hopefully people take a lesson from this.

But I have a hrad time believing people will learn since many home owners of homes I'm interested in to buy, have had foreclosres like 10 years ago, so they haven't learned a thing, only that it will affect their credit score for 7- 10 years and they can start to do the same thing again!

If you can hold on to your house I would do it....how would you feel when the market goes up in like 2 years and your house is worth so much more and some one else is making a huge profit just because you let it go right now?
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Old 09-30-2008, 10:53 AM
 
Location: Oxygen Ln. AZ
8,691 posts, read 10,943,563 times
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Can you ask your tenants if they need to get out of the two year lease? YOu could start looking for some more stable renters. Best of luck, the market here in AZ is sad.
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Old 09-30-2008, 02:21 PM
 
516 posts, read 1,233,988 times
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Quote:
Originally Posted by bentlebee View Post
But I have a hrad time believing people will learn since many home owners of homes I'm interested in to buy, have had foreclosres like 10 years ago, so they haven't learned a thing, only that it will affect their credit score for 7- 10 years and they can start to do the same thing again!
The way you phrased that, it sounds like you're saying that anyone who had a foreclosure 10 years ago hasn't learned anything and is just going to get foreclosed again. How long would it take for someone who has been foreclosed to have "learned"?
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Old 09-30-2008, 04:35 PM
 
82 posts, read 216,321 times
Reputation: 14
Quote:
Originally Posted by jco View Post
We own a home in AZ and a home in TX, where we live. We've rented the AZ house for $200 less than our mortgage payment because it won't sell right now. We want to keep it and pay the mortgage simply because we signed paperwork that said we would, and we want to keep our promises. We also put 45k down on the house, all of which we've lost in equity and then about 5-10k from what I know about the market right now. The first renters called one day and said that they couldn't pay the rent anymore, so we should find new ones. Lovely. We found new renters. They've paid late every single month, and it's turned out to be two weeks late for the last two months. I know they're in sales, and they must be financially hurting. We don't have the money to pay two mortgages, and I feel like I'm just waiting for them to ditch their two year lease and run off. We're doing all we can to pinch pennies and save up. I'm wondering, though, what would happen if we just couldn't pay the mortgage on our rental and it was foreclosed upon? Would we lose the home we live in now, too?
no but your credit will be ruined
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Old 09-30-2008, 08:45 PM
cob
 
22 posts, read 47,194 times
Reputation: 18
Quote:
Originally Posted by bentlebee View Post
Can't you refi? i know they only do that for primary homes...if I right about that.

You stated you will lose out the down payment, equity as you stated....but if you foreclose what about the money of others that you got for your mortgage...Most people only talk about what they will lose...and I don't want to sound to harsh and I know you try to do the right thing by renting it out.

I have more than one home and have good renters and I'm aware that anytiem they can fail to pay due to what is going on, but in todays market many more people need to rent and so the rentls prices in my area went up. So I raised the rental price when I got a new renter last December and if they move out I will raise the amount again. This is business and IMO the markets will solve them self. People who couldn't afford the homes shouldn't have bought them, and hopefully people take a lesson from this.

But I have a hrad time believing people will learn since many home owners of homes I'm interested in to buy, have had foreclosres like 10 years ago, so they haven't learned a thing, only that it will affect their credit score for 7- 10 years and they can start to do the same thing again!

If you can hold on to your house I would do it....how would you feel when the market goes up in like 2 years and your house is worth so much more and some one else is making a huge profit just because you let it go right now?
IN 2 YEARS yea right this thing is going to take at least 5 years to level out. then who knows what will happen, people are trying to hold on for the last 2 years thinking the market is going to get better but it just got worst. know all of this people are finnally giving up.
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Old 10-03-2008, 12:58 PM
jco jco started this thread
 
Location: Austin
2,106 posts, read 4,629,031 times
Reputation: 1332
Once again I've received an e-mail from our renters saying that they can't pay until the second week of the month. It's such a stress for us to have to keep coming up with so much money to pay two mortgages and then just hope that they pay us the rest of the month's rent when they promised. We do not have any desire to hang on to this house in all honesty. I do care about my credit and about doing the right thing. I never wanted to be a landlord, but unfortunately, our house is in one of the hardest hit cities in AZ. We live out of state, so it's not that easy for us to find new renters. When we first rented it, we had one response in two months. In the summer, we had thirteen responses in 24 hours. The summer's passed, though, and it's not the same right now.

I'm just wondering what would happen if in the end we can't pay the mortgage. We have a couple month's mortgage in savings, but we couldn't pay beyond this.
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Old 10-03-2008, 01:13 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 21,128,375 times
Reputation: 2661
Quote:
Originally Posted by jco View Post
Once again I've received an e-mail from our renters saying that they can't pay until the second week of the month. It's such a stress for us to have to keep coming up with so much money to pay two mortgages and then just hope that they pay us the rest of the month's rent when they promised. We do not have any desire to hang on to this house in all honesty. I do care about my credit and about doing the right thing. I never wanted to be a landlord, but unfortunately, our house is in one of the hardest hit cities in AZ. We live out of state, so it's not that easy for us to find new renters. When we first rented it, we had one response in two months. In the summer, we had thirteen responses in 24 hours. The summer's passed, though, and it's not the same right now.

I'm just wondering what would happen if in the end we can't pay the mortgage. We have a couple month's mortgage in savings, but we couldn't pay beyond this.
Don't sweat it. As Mortgage King said a credit hit is about it. I don't even agree that it will turn out that bad. There are simply too many people in the same situation for this particular "sin". A couple of years out it will gets discounted into the less important class.

You hear stories about deficiency judgements. Just that. Talk to a local lawyer if concerned but the probability of a deficiency judgement across state lines as a property lien is zilch. They may be able to theoretically get one depending on state law. But in practice it is a very rare occurence. Generally means they think you have money.

So try to hold it together...but don't panic if it come unstuck.
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Old 10-03-2008, 01:28 PM
 
2,268 posts, read 5,610,621 times
Reputation: 1205
Don't just foreclose and do nothing. That isn't helping yourself and is only adding to the situation.

Once they are a day late, file the eviction notice. Get them out of there. It is either you or them who is going to lose. You have control of the situation so why should you lose.

Be sure you pre screen your renters. Make sure they can pay on time, each and every month. Let them know they will be out the second they don't pay.

Don't play victim and just fold. Things can be done. Talk to some lenders, talk to your lender. See if they can do a short sale. Don't just walk away and do nothing.
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