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My husband has a property in AZ which he bought before we got married and co-owns with two other people, who now can no longer pay their part. So we have to short sale. I do not want to pay for the $100K difference between the short sale price and the mortgage on this home, because my name is not on any document related to the house. I know that the other two co-owners will NOT pay for their part of the 100K difference. I am afraid the bank will come after me/DH for the entire amount, because our monthly expenditures are low. To prevent this from happening, we need to get a home so that we can increase our monthly expenditures when we go to short sale. The other co-owners already have a home and their budget is already stretched.
We do not have a house right now and have been living way under our means for years just to save up money. We had been looking to buy for the last 2 years before this all went down.
My question is this: Will the banks reject our short sale terms if we bought a home now? How long after we buy a home will it be safe to start the short sale process and not make the bank mad?
I need to not to get screwed by this. Most of the money in our assets is technically mine and I did not suffer through the last 10 years just to have it depleted in such a way. Thanks for any advice.
Your hubby and the other owners are responsible for the property and the loan. He will not be allowed to buy a home with government backed financing for 2 years, and then it will still be difficult.
Do you live in the area? Was it an investment property? Since you have cash, why not get the loan current and have the other owners quit claim it to you?
This is an interesting situation. I don't know anything about it, but, if I were in your shoes, I might consider getting a lawyer, to make sure I understand the risks.
This is an interesting situation. I don't know anything about it, but, if I were in your shoes, I might consider getting a lawyer, to make sure I understand the risks.
A good CPA is important as well as the tax implications could be huge here.
My husband has a property in AZ which he bought before we got married and co-owns with two other people, who now can no longer pay their part. So we have to short sale. I do not want to pay for the $100K difference between the short sale price and the mortgage on this home, because my name is not on any document related to the house. I know that the other two co-owners will NOT pay for their part of the 100K difference. I am afraid the bank will come after me/DH for the entire amount, because our monthly expenditures are low. To prevent this from happening, we need to get a home so that we can increase our monthly expenditures when we go to short sale. The other co-owners already have a home and their budget is already stretched.
We do not have a house right now and have been living way under our means for years just to save up money. We had been looking to buy for the last 2 years before this all went down.
My question is this: Will the banks reject our short sale terms if we bought a home now? How long after we buy a home will it be safe to start the short sale process and not make the bank mad?
I need to not to get screwed by this. Most of the money in our assets is technically mine and I did not suffer through the last 10 years just to have it depleted in such a way. Thanks for any advice.
A few things:
You live in Arizona, a non- recourse state. So you may be fine just letting it go into foreclosure as long as you did not cash out refinance to buy non-home releated improvement (Cars, TVs, pay credit card debt) but consult an attorney first. I don't think they can go after you for anything more than your home. That's why you see so many foreclosures in California and Arizona (both non-recourse loan states)
Second. If you live in Flagstaff, See IRS Publication 4681, Page 11 (amended 12/11/08). The IRS ruled that even Investment homes can have debt forgiven as part of the Mortgage and Forgiveness Act of 2007.
Third. Can you afford the new home under your name only with just your own income? That's an option.
Fourth. Can you and your husband afford both homes with both your incomes, while putting down at least 20% down for the second home? That's another option. The lenders will exclude any potential rental income from the investment home since there's no equity.
Do you live in the area? Was it an investment property? Since you have cash, why not get the loan current and have the other owners quit claim it to you?
I think this is not good advice. Why would someone want to take a property that 100K underwater.
Quote:
Originally Posted by stan4
Frankly, y'all are responsible for the house and shame on you for walking away from that responsibility.
How is this the OP's fault? Her husband bought this before they were married on his own. She shouldn't have to deplete her assets because her husband made a bad investment.
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