[merit1sje]

The bottom line is that it is a signed and agreed to contract. All contracts are enforcible by law. Your mortgage is a contract. The home is a secured debt in the contract i.e. your home is looked at as collateral. If you default, the bank seizes the home, sells it and uses the proceeds to pay back the debt. If there are others who have a vested interest in your debt (which there are) they more than likely have the right to sue to recoup losses. I had to pay the difference (on a vehicle that I co-signed for) between what it sold for at auction and the balance that remained on the loan. This was an unsecured loan by the way! More than likely, the mortgage holder has full rights within the law and within a given period of time to recoup losses from you. I would talk to several different kinds of lawyers to get a perspective on what would be your best strategy.

[boutrous]

i stopped making my mortgage payment about 5 months ago. I'm "underwater" by about 50 grand. I tried to get my loan modified, but didn't qualify.

i need to decide quickly whether to go all the way to foreclosure, or attempt a short sale. My lawyer/banker friends have told me they don't think the banks are going to come after anyone... there have been multimillion dollar deals that have been walked away from that haven't been pursued from years ago.

[drumr]

I have not read the whole thread but here is a quick note.

In most cases they can't. There are anti-deficiency laws passed by many states.

The common practice is that if you short sale on any asset, a creditor will issue a 1099 in which you have to report as income on your taxes. Because of the large amount that can come from real estate, some states have responded with anti-deficiency laws to keep lenders from 1099 you for the difference.

I am not sure if any exists on a federal level but this is what I would seek. I am currently living in Arizona after being born and growing up in Michigan for 25 years so I am not sure what the current state of these laws might be in Michigan.

[tulips4you2]

When my Dad became sick several years ago and my parents lost their home the bank sued them for the amount owed on their mortage.

[abrandl]

I reside in Michigan. If I purchase a new home and walk away from my current home will my original mortgage lender be able to come after me,even if they short sale it after it goes into foreclosure?

[Arthur Digby Sellers]

Originally Posted by abrandl

I reside in Michigan. If I purchase a new home and walk away from my current home will my original mortgage lender be able to come after me,even if they short sale it after it goes into foreclosure?

Yes. They can come after you for the remaining balance on the mortgage, assuming the sale price is less than what is owed on the mortgage.

We decided to rent our house which is 30K underwater, move and try to sell it after about 3-4 years. There are a lot of people who have to rent due to foreclosures destroying their credit, which has pushed rental prices higher. It's allowing us to move without ruining our credit. However, the trick is qualifying for a 2nd mortgage, because the banks won't recognize rental income.

There are companies in Michigan who will manage your property if you build a home with them. They guarantee a set rent income whether the home is occupied or not.

New Homes - New Construction Homes - Rent Old Home, Buy A New One |

There are other property management companies that will do the same thing but you don't purchase a home through them.

Property Management Companies In Michigan : MI Home Leasing, Renting Property Manager

It's a good option if you need to move but are underwater.

[TheWayISeeThings]

Originally Posted by Arthur Digby Sellers

Yes. They can come after you for the remaining balance on the mortgage, assuming the sale price is less than what is owed on the mortgage.

We decided to rent our house which is 30K underwater, move and try to sell it after about 3-4 years. There are a lot of people who have to rent due to foreclosures destroying their credit, which has pushed rental prices higher. It's allowing us to move without ruining our credit. However, the trick is qualifying for a 2nd mortgage, because the banks won't recognize rental income.

There are companies in Michigan who will manage your property if you build a home with them. They guarantee a set rent income whether the home is occupied or not.

New Homes - New Construction Homes - Rent Old Home, Buy A New One |

There are other property management companies that will do the same thing but you don't purchase a home through them.

Property Management Companies In Michigan : MI Home Leasing, Renting Property Manager

It's a good option if you need to move but are underwater.

So I'm curious. I've been listening to these "don't think you can move..." commercials for a few months now and I find the euphoric, too-good-to-be-true message somewhat dubious.

Marketplace offers you two years rent guarantee I believe, in which time they act as a property manager for your old home while they sublet it to a "rent to own" prospective buyer. After the two years the tenant can decide to buy and get some credit towards the home price. What is the tenant decides not to purchase but to move? Once your agreement with marketplace is up, you may still be saddled with two mortgages.

They offer $5000 in property damage. To cover damage to your house? That is low for a car. What if the tenant strips and sells the kitchen, appliances or causes major water damage? Who's on the hook for the balance? I'd hate to find myself in a situation where I was handed back a home with 50K in damage while carrying two mortgages and had no contractual connection to the tenant.

It just seems like this has a high potential to cause problems for the home owner. If they feel so confident that everything is going to go right, then why won't they take over the title? I'd also never enter into any agreement where a third party holds the contract with the tenant but does not carry the homeowners liability entirely.

Lawyers, feel free to poke holes in any of this.

[Arthur Digby Sellers]

I looked into Marketplace and had one of their agents price out our home. The "guaranteed" rate is only good for a year, and is subject to market fluctuations. Basically they sign tenants for a one year lease, and once that is up they can renegotiate with you on the rental price. You can opt out if you don't like the price they're giving you.

They guarantee your home is returned in the condition you left it in.

Ultimately I decided to not go with them because I wasn't comfortable with a 3rd party managing my home. They make decisions on repairs which you get sent the bill for. If my furnace blows out, I want to be making the decision on a replacement.

They also lock you into a price you agree to let them sell your house for should they find a buyer. I didn't like that because if I agree to the balance of my mortgage now, but home prices bounce back in 5 years, you're stuck with the price in the contract.

It's definitely not a "worry free" option, but I don't think its a scam either. It's just another form of property management and you have to realize that you still own your home.