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sunnyca2009
Joined: 04 Aug 2009
Posts: 1737
36.13 Dollars($)
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Just to add
If the lender forgives the deficient amount, the amoutn is genrally taxable. Lenders would normally send you 1099. But the current law protects you from it till 2012. You will need to file it when you rpeort the taxes, btu you will nto eb taxed |
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leeelliot61
Joined: 13 Sep 2009
Posts: 189
20.14 Dollars($)
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legalbeagle,
It is upto your mortgage lender. he can ask deficit amount from you |
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Stephanie
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Post subject: Parents bought house... |
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| My parents bought a house for my family and I to live in because house prices were so high...that was 5 years ago. We were paing the mortgage as rent payments to my parents and they were writing the check to the bank for the actual mortgage. Last month I was laid off from my job and we can no longer make the payments. The value of the house has declined by almost 1/2 the mortgage amount so selling it won't give enough to pay off the mortgage. What are some other options for them? |
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Dlo
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Post subject: Short sale |
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| Unfortunately, I haven't been able to keep up with my monthly mortgage payments for the past 10 months. I've done every possible method, which may lead me to a loan modification with my lender, but today I received a notice notifying me that I did not qualify. therefore the only option suggested by my lender is a short-sale. I do not want to lose my home, but taking into consideration that I paid $670,000 and now is only worth $430, makes me meditate over the situation. On the other hand, I also fear for my credit to have a scar for a very long time and not be able to purchase a new home during my lifetime. What do you guys recommend? |
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jenkin7
Joined: 04 Jun 2007
Posts: 3429
Location: Hawaii
514.13 Dollars($)
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Hi Stephanie,
When the mortgage payment is stopped, the lender will start foreclosure proceedings against the property. Would you be able to make some amount of payment, if the lender decides to reduce the mortgage payments? If you will, then you can ask for a loan modification. Are you on the loan? If you are not on the loan and only your parents are, the lender might not be ready to modify the loan. The other option would be to go for a deed in lieu of foreclosure. This will avoid foreclosure on your credit. However, if you want to keep the house, you need to make the mortgage payments. In that case, a loan modification is the best possible way to go.
Hi Dlo,
A loan modification could have been the best option as it would have helped you make your mortgage payments. Since you do not qualify for the modification, a short sale or a deed in lieu of foreclosure seem like the only two possible options in this situation. If you go for the short sale and the property is currently worth only about $430, you will owe the difference of about $240. You will have to pay off this difference, else the lender may sue you for non-payment. A deed in lieu on the other hand will affect your credit more than a short sale. But chances are that you will no longer have to pay off the difference. Both short sale and deed in lieu will affect your chances of qualifying for a new mortgage for at least 2 years. But provided you improve your credit after the short sale or the deed in lieu, you can surely go for a home loan and make a new purchase 1½- 2 years later. |
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hillary
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Post subject: short sale rent |
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| I have my home in a short sale, Can I rent it out? |
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7448
Location: bloomfield, ct
70.12 Dollars($)
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you probably could do so, hillary, but what kind of tenant do you expect to get? you'd have to settle for a transient, since you won't be owning the home pretty soon. right? keep in mind that as soon as you sell it, you won't own it any longer, and therefore wouldn't be able to collect any rent. you'd have to be upfront about your situation with anyone who even considered renting from you.
i think it's a waste of time to try it.
_________________
George M. Akerley
Loan Consultant
860-221-5044 |
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hallandalefl
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Post subject: Short sale with HELOC on Property |
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| My property is far under water and I have a $50k HELOC that was granted back during the good days. Even if I paid off the HELOC, the property is still $100k under water. What are the credit implication of a short sale? I used to live in the property for 2 years, but now it is rented out. So far I have been making payments, but see no rebound in 3 years when interest only loan expires. Why would I continue paying now if refinancing is dead? |
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savior70
Joined: 25 Mar 2009
Posts: 1422
Location: Florida
168.75 Dollars($)
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Hi,
You can request the lender to allow you to short sell the property. A short sale is a good option as it can help you avoid a possible foreclosure. But you ought to remember that if you fail to repay the loan in full from the short sale proceeds. You will remain responsible for the deficiency. If you want to short sell the property, you need to send hardship letter to your lender and request them to accept a short sale. |
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anonymous mn
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Post subject: Short Refi |
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| My mortgage company (Chase) contacted me about a refi offer. As it turns out they want to take 15k off my principle and give me a lower reate. Seemed to good to be true...I will have to pay taxes on the 15 as income and what about my credit score? |
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tle
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Post subject: short sale |
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| How long before your credit would be begin to get better after a short sale? |
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7448
Location: bloomfield, ct
70.12 Dollars($)
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tle, as long as your credit report doesn't contain other derogatory information, and you continue to make timely payments on any other indebtedness you have, your credit report will improve as soon as the next round of updates takes place. that's not to say you'll see a major improvement, but the simple act of making payments on time will always provide a benefit. the only caveat i will add to this is that you will need to avoid frivolous inquiries. don't go applying for any credit, as this will be adverse to you.
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George M. Akerley
Loan Consultant
860-221-5044 |
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