Foreclosure ????'s I can't get answers..... (account, dollars, garnish, withdraw)
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I can not believe how much I am being scrutizied over asking the questions that no one has asked. Most people in the same situation as me just leave their house, let it go into foreclosure and move on. I have created this huge discussion because I wanted to know what happens to someone when they do this. Basically the answer that I have received is that you become the scum of the earth.
For those that are wondering; I am not behind on my payments yet. My child is not sick in the hospital with cancer, we are like most people; we are overstretched financially. That is our own problem.
I love the people who blame the fact that I am upside down on my house because we refinanced and paid off our car and a few credit cards. You guys are acting like I pulled out the 100k and used it all. We pulled out $20,000. And when we did it we still had $40,000 in equity so that is not the problem.
I posted this question because my husband had a job offer in a different city. I wanted advice on what to do. I doesn't bother me that you all judge me for asking a question. I am not the only one in this situation; it could be your best friend, brother, co worker even your daughter or son one day, and there is nothing you can do but judge what we do. And it doesn't bother us, because we know who we are.
I feel for you and I, for one, don't judge you. Let the bank know you want to give them the deed to the house. Do a deed in lieu of foreclosure. At the same time go and file a Ch. 7 bankruptcy. This way they can't come after you for the difference. Many times you can do the Ch. 7 yourself, I know have done it for friends and family even with the new law. PM me if you need further advice. I am not an attorney but when you are in dire straits, it is best to be honest with the lender. Have you thought about putting it up for sale? Do you think you could get what you owe on it? If the answer is no, do the deed in lieu of foreclosure. Get through that process then the next day after the deed is done, go and file a Ch. 7 bankruptcy. Your life will be a lot better. And in the mean time rent. The economy and real estate market is only going to get worse. We will be renting for a good 3 years b/c we, as you discovered, did not see the so called "perks" of owning a home, ie. maintenance, maintenance, taxes, insurance and on and on. I feel for you. Good luck. ((hugs))
Incorrect, the money is lost every month she continues to write a check throwing good money into a badly financed property.
I disagree - the house will one day catch up to what she's paid into it, and one day will be worth more than she's paid into it. The longer that she can hang in there, the less likely she'll have to take a loss on it. If she runs from it now, she'll take a loss. If she hangs on a few years she'll break even. If she hangs on ten years, she'll have equity in it.
The mistakes they made in the choice of loan products and how they used the equity in their house may mean it will take them longer to break even, but as long as they don't use their equity to finance their debt or consumer purchases again they'll be okay.
I disagree - the house will one day catch up to what she's paid into it, and one day will be worth more than she's paid into it. The longer that she can hang in there, the less likely she'll have to take a loss on it. If she runs from it now, she'll take a loss. If she hangs on a few years she'll break even. If she hangs on ten years, she'll have equity in it.
The mistakes they made in the choice of loan products and how they used the equity in their house may mean it will take them longer to break even, but as long as they don't use their equity to finance their debt or consumer purchases again they'll be okay.
Your assuming facts not currently in evidence.
What is known is that she currently owes $280,000 on a property thats valued at $180,000. Property values are not going up, they are going down, and while one day, that property might be worth $280,000 she currently owes, the question is when? Should she continue to pay $2500 a month for the next ten years, hoping that the property value will go up to more then she owes? That would be $300,000 in mortgage payments, plus the estimated $200K balance that would be left in ten years. She still put out $500,000 on a $300,000 property and she's still in the hole.
Granted, her losses might be minimized because she could rent it out, (as she's planning to move out of state) but you then have to add in costs of property managers, and higher wear and tear then if she was living in her own property.
I agree that she made a mistake in the loan that was chosen, just like so many have done. I also believe that far to many people have over paid for their properties over the last six years. Not a chance that real property values have doubled in value but thats what people were paying for them.
Dont mis-understand me, I think her first action should probably be to call the bank and re-negotiate the ARM loan or try to refinace, but she cant take that action until she determines if she's going to take the out of state job, and if she's willing to rent out her home. All I'm stating is that bankruptcy is a very last resort nowadays. I would go into bankruptcy yelling and screaming, and only do it upon the bank trying to come after me for the losses they incure. I'd make this choice because I have actually never heard of a bank going after a property owner for the "losses" and balance after they sell a property. Banks dont like to throw good money after bad, and neither should people who are unsure of their financial ability to enter into an upside down mortgage without any positive side other then, "honoring their responsibility" as so many here has stated she was obligated morally to complete.
Hey Guys,
Even if I got a loan modification done on the 1st mortgage. I would not be able to rent this place out for more than $1000 (leaving me a difference of around $1000). Even though I live in a city that doesn't really have a "bad" area, this place is not in the best area. Plus I don't know if I mentioned this before, but we bought 1/2 of a half plex. Yes, I know....... We were not thinking.
I feel for you and I, for one, don't judge you. Let the bank know you want to give them the deed to the house. Do a deed in lieu of foreclosure. At the same time go and file a Ch. 7 bankruptcy. This way they can't come after you for the difference. Many times you can do the Ch. 7 yourself, I know have done it for friends and family even with the new law. PM me if you need further advice. I am not an attorney but when you are in dire straits, it is best to be honest with the lender. Have you thought about putting it up for sale? Do you think you could get what you owe on it? If the answer is no, do the deed in lieu of foreclosure. Get through that process then the next day after the deed is done, go and file a Ch. 7 bankruptcy. Your life will be a lot better. And in the mean time rent. The economy and real estate market is only going to get worse. We will be renting for a good 3 years b/c we, as you discovered, did not see the so called "perks" of owning a home, ie. maintenance, maintenance, taxes, insurance and on and on. I feel for you. Good luck. ((hugs))
Since we have a 1st and a 2nd, it is my understanding we would only be able to do a deed in lieu on one of them. Plus I don't think we would qualify for Chpt 7, I think we would have to do 13, and then what's the point of filing, you still have to pay it back and have it affect your credit. I would try to talk to the bank first. I would think anyway. Let me know what you think.
Since we have a 1st and a 2nd, it is my understanding we would only be able to do a deed in lieu on one of them. Plus I don't think we would qualify for Chpt 7, I think we would have to do 13, and then what's the point of filing, you still have to pay it back and have it affect your credit. I would try to talk to the bank first. I would think anyway. Let me know what you think.
You can file either 7 or the 13.. Chapter 7 if you want to give up the property, Chapter 13 if you want to keep the property and have the court negotiate the amount due, and the interest rates. Chapter 13 will stay on your credit report for 7 years, AFTER discharged, Chapter 7 will stay on the report for up to 10 years.
If you file Chapter 7 you would not have to pay anything back, but like I stated, I would not file bankruptcy. If anything, If I was determined to lose the property I would try to send the keys in, let the banks fight it out, (the 2nd mortgage company has to either buy out the first mortgage, or relinquish any control over the property).
If and only if they come after you for the balance due would I file bankruptcy.
The first thing to do is call to see if the banks are willing to re-negotiate the terms now, before the ARM kicks in. I would even call the 2nd mortgage company and see about lower interest rates etc.. (watch for refinancing costs because you want to avoid them).
One thing other posters havent stated, but they should have is that you do need to live somewhere. If your not moving out of town, trying to save the house isnt a bad idea, under the right payment agreement.
In a deed in lieu of foreclosure, the property is signed over to the bank in exchange for the bank giving up its rights against you.
Here is an interesting article I found on bankrate that explains some of the new laws with regards to the "difference" when doing a short sale and the tax implications
Are you kidding me? Pay your mortgage! It is just this thought process that is helping to perpetuate the mortgage crisis.
Ok, seriously, you will still be responsible for the debt that the bank loses. In short sales, the bank often requires you to sign a document that states that you still owe what the lost. Also, there are IRS tax consequences for debt relief. Debt relief is considered "consideration" and can be subject to income tax. No kidding.....
Pay your mortgage.
Well u may want to check on prices again the prices have improved a bit..As far as renting the house goes, you may want to keep students as guests, if you are owning about half the duplex...and save on rent which u can adjust in ur first arm..try & get this refinanced if your property has equity pay off the 2nd lien. It is difficult to do such a mortgage but not impossible.
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