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I hate to say it but we are facing foreclose. A few months ago my husband got a job out of state and we jumped on it since layoffs were flooding in at his current job and I’ve been looking for work for over a year.
We fell into the crazy house buying spree of 2007 and bought a condo that we loved. The taxes have increased dramatically and so have the HOA dues. There are over 200 units in our complex and several are foreclosed on and more then 20 are on the market for pennies on the dollar. We can not rent out our unit because the complex has already hit the rental cap. We have tried but quickly got letter giving us warnings and we would face a very hefty monthly fine if we did so. Selling is not even an option, even a short sale. More then 5 units are up for short sale now and have been for over 6 months without even a hit. We bought our condo for over 250k and they are now listed for only 120k.
We have tried to keep up on our mortgage since we moved 3 months ago, but it’s just not possible with our housing expenses in our new state. We missed out first mortgage payment a month ago and quickly started receiving calls from collections.
My question is what is the process? I have heard that you still have to keep HOA and taxes up to date. But this is almost impossible unless we don’t eat.
Should we call out bank and mail them out keys? I’m afraid to answer the phone because I don’t know what to say.
When you get in a bad situation you can either try to make sure it does not get worse or you can ignore it AND IT WILL GET WORSE.
You should have talked to your lender a LONG TIME AGO, even if they were unwilling to do exactly what you may have wanted IT WOULD HAVE BEEN SMARTER TO AT LEAST KNOW WHERE YOU STOOD.
Given the situation you describe I think the best thing may be a "deed in lieu of foreclosure" that, TOGETHER WITH THE LENDERS APPROVAL would absolve you from the debt and they won't have any financial claims against you. The most important point is to get all the i's dotted and t's crossed so that the HOA does not come after you and of course you need to stay current on all the related bills until the deed is transfer back to the lender. If you do this correctly you won't owe taxes on the forgiven debt, if you DO NOT DO THIS PROPERLY the lender and HOA can still try to collect the debt and you may have no out except bankruptcy.
When a d-i-l appears on your credit report it is similar to a foreclosure and you will probably be unable to get a mortgage for at least two years. If you had started down this path earlier you may have been able to a) keep more money to deal with bills b) been closer to when those two years are up c) maybe been able to get another place lined up with a mortgage that you could have afforded even while carrying this place. That won't happen now. You will have to rent or live with some one else until almost 2012. Things could be worse -- if you have a bankruptcy some landlords won't consider renting to you or will require massive deposits.
SO -- get all you info together as soon as you can. Contact the lender. Tell them that things are getting very very close and you really need to focus on getting the deed transfered back to them asap and you want to do so in a way that absolves you of any obligations. You might want to talk to an attorney or legal clinic / legal aid to make sure the lender is playing fair and not leaving themselves any sneaky out (typically the agreements do say that the borrower will not be excused from the debt if the lender uncovers evidence of fraud, but other than that you want an ironclad guarantee that once the deed is signed over you won't have any obligations and no collections agencies will be involved). Don't share any info that is going to hurt you. Don't tell 'em the place is vacant, if they ask point blank about where you are living explain this is stressful and you & husband are splitting time to get a new place setup. On the scale of untruths this is pretty harmless and unless you think that someone in condo complex is going to kick in the door and become a squatter the lender really is better off and so are you...
It is generally best to hit the web and get the hotline number that your lender almost certainly has set up to deal with problems like this. Use the phone menu to get to the situation that describes where you are in terms of geography and the fact you have already missed payment(s). Much more likely that you get someone that can start to schedule things than dealing with the collections type people trying to call you...
I feel bad for you. Losing a job sucks, having to move makes it worse. Toss in the facts about your condo and things sound really bad but they COULD BE WORSE. You have to step-up and get moving so that you are out from under this as soon as possible. Once it is all wrapped up you can start over and use the knowledge you have to do better. Of course you don't want to answer the phone if the people at the other end are going to try to intimidate you into sending them money you can't afford to, it is human nature to avoid doing things that are not in your interest. Take charge of things and face the fear knowing that you will learn from this and end up in a good place.
I have over two decades of involvement in real estate. I try to recommend to people to AVOID condominiums because of some the reasons you state: HOA can escalate costs tremendously, restrictions on renting can leave you with no options, too many other vacant units will make it impossible to get financing for any buyers. Prices fall off a cliff as only investors with cash become 'bottom feeders' and are unwilling to offer more than a fraction of value... Really bad situations can happen very quickly.
For goodness sake DO NOT do anything stupid like mail the keys to the lender. They could still hold you responsible for the debt and all expenses related. You would almost certainly be wiped out. Do this in a smart way and things will work out.
Good Luck!
Last edited by chet everett; 11-10-2009 at 06:01 AM..
When a d-i-l appears on your credit report it is similar to a foreclosure and you will probably be unable to get a mortgage for at least two years. If you had started down this path earlier you may have been able to a) keep more money to deal with bills b) been closer to when those two years are up c) maybe been able to get another place lined up with a mortgage that you could have afforded even while carrying this place. That won't happen now. You will have to rent or live with some one else until almost 2012. Things could be worse -- if you have a bankruptcy some landlords won't consider renting to you or will require massive deposits.
Uh, the OP already has a new house and is having a grand ol' time renovating and redecorating:
Actually, not that I feel I need to explain myself but the house was bought by my fathers friend and we are renting to own from him. Eventually it will be our house and we are redoing the kitchen mostly with money set aside as an incentive by the seller. Paying a few hundred dollars a month on a credit card is nothing like the huge mortgage, HOA, and taxes on our condo. The rent to own option is less then ½ of what our housing expenses were on the condo. Even if my husband was able to keep his job there we were already looking at loosing our condo as with me without work it was sucking our savings dry. If we did not move we may have been able to make regular payments for 4 more months, but by then my husband would not have a job. I feel we made the right decision although hard and I am shocked at how critical some of you are.
Actually, not that I feel I need to explain myself but the house was bought by my fathers friend and we are renting to own from him. Eventually it will be our house and we are redoing the kitchen mostly with money set aside as an incentive by the seller. Paying a few hundred dollars a month on a credit card is nothing like the huge mortgage, HOA, and taxes on our condo. The rent to own option is less then ½ of what our housing expenses were on the condo. Even if my husband was able to keep his job there we were already looking at loosing our condo as with me without work it was sucking our savings dry. If we did not move we may have been able to make regular payments for 4 more months, but by then my husband would not have a job. I feel we made the right decision although hard and I am shocked at how critical some of you are.
Some on this forum are downright disgusting. They are truly showing their arrogance and ideology that they truly only interested in their own well being. There is a clear and distinct unprecedented sense of entitlement on this forum. I could generalize this to a profession specifically, but I'll refrain. If you read the tone of responses here, it speaks for itself.
And don' forget, HENCE THE POST BELOW, when you purchased this condo in 2007, for double what is it worth today........NOW WAS THE TIME TO BUY? Did you get that song and dance routine back then? For some reason, I think I already know the answer. But you are now the only bad guy in this. See how they operate? They are part of the culprits in this mess, but as long as that commission keeps coming............
Last edited by WilliamHarman; 11-10-2009 at 12:38 PM..
I'm not going to post links to the OPs previous posts that leave no doubt that she did buy a house - unless, those were fibs too. (Things like POAs, attending closing - stuff that people that buy would need to do.)
Because, well, those are easily findable.
I'm a little critical of your decision because I'm a little tired of able bodied people shirking their responsibilities and leaving a mess for someone else to clean up.
It really bothers me.
I'm sure you're a nice person and all, but the lack of personal responsibility from not only you - but a lot of people who've come to these boards and posted - really irks me.
Yes we were there for everything. Inspections, closing, etc… I’m lucky to have a great dad with a great friend that purchased a home for us and we are buying it from him. I don’t see why this is a problem? Obviously if we already have a condo in another state and my husband is the only one with a job, a new job, then we would not be able to get a mortgage.
I think you might want to go back and re-read everything you posted.
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