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madeline · Joined: 02 Dec 2008 Posts: 1 2.91 Dollars($)

Here's my situation in a nutshell:

1 - I have 8 good mortgs on rental properties and my personal home
2 - I have 1 really high mortg on a property that I'm trying to sell and I can't make the payments on it anymore with my current cash flow. I will pay the bank back the full amount when it sells since there's some equity in the property, but it doesn't make sense ot me to keep borrowing from other sources (which have now pretty much dried up) to make the mortg payments.
3 - I have 2 mortgs on 2 pieces of some raw land that are costing me about $1,000 a month. There's NO equity in the property (long story and a hard "learning" lesson<sigh>). and I'd like to just give it back to the bank which would more than cover the mortg - I'm currently looking into my options re this.

Question - If I"m going to default on ONE property (#2 above) and take the hit on my otherwise spoltess credit, does it really make any difference if it's TWO or more properties? i.e. once I start down this slippery slope or ruining my credit, is there any damage control available or am I just going to have crappy credit for 7 years?

Thanks

elnoralittle · Posted: Wed Dec 03, 2008 7:59 am Post subject:

Your credit will be damaged for quite some time.

The turn around for defaults are typically 4 years from the date of the foreclosure.

Contact the loss mitigation department of the mortgage holders and see if there is something you can work out with them. Short sales are the best option if you can.

gmakerley · Posted: Wed Dec 03, 2008 10:40 am Post subject:

well said, elnora

Guest

The question really is: If I'm going to default for a while on 1 mortg, does it hurt my credit anymore, to to that on 2 or 3 mortgs, while I wait for them to sell. Thanks

smithsussane · Posted: Wed Dec 03, 2008 7:14 pm Post subject:

Hi!

Welcome to forums!

Yes, it will definitely hurt your credit. If you default on your mortgage for sometime, the lender may start foreclosure proceedings against you. And if the lender completes the foreclosure procedure, your credit score will be lowered by 250 points.

I think you should follow the suggestion given by Elnora - contact the loss mitigation department of the lender or check if a short sale is possible in your case.

Feel free to ask if you have further queries.

Sussane

Guest

What noone seems to ask on the posts I've seen is what happens after you do a deed in lieu or a short sale? Are you on the hook for the balance owed? We're in the middle of a short sale and were told that the banks eat all closing costs and that we'd be able to walk away. Now the banks and are attorneys say we've got it all wrong and we're on the hook for the debt (and now are short one property)

adonis · Posted: Tue Jan 13, 2009 11:40 pm Post subject:

Hey Gerstend,

In case of a deed in lieu foreclosure, the lenders forgive the deficient amount resulting from the sale of the property. But you will pay taxes on the forgiven amount. However, if you go for a short sale, the lender will ask you to pay the deficient amount. However, if your state follows the anti-deficiency laws, then the lender cannot sue you for the deficient amount.

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8 good mortgs, may default on 1 or 2