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tluke002 · Joined: 13 Jun 2010 Posts: 1 1.47 Dollars($)

I am in the Florida construction industry and have seen my income cut from $100k to under $50k. My income is largely based on my bonus, which I will not see for 9 more months. I was promoted/transferred 2 years and ago and now I unfortunately own 2 homes. I have rented out home 1 the last two years, but I am having difficulties finding a tenant, and the bank won't talk to me until I am delinquent. I am getting married in a year and had a perfect credit score. I need some advice on what to do.

Here is my total financial picture:

Home 1: The unfortunate rental
This home is completely in my name. I owe $155k. It is worth maybe $110k. It is a 2/1 up against other 3/2's. I pay $1350 a month and have rented it for $975 the last 2 years. I have not been able to find a tenant the last 2 months.

Home 2: The primary residence:
My fiancee and I own this 50/50. We paid $189k a year ago and could probably get $189k for this house if we sold it right now.

If I can't get a tenant next month in Home #1, my savings will be depleted and I will become delinquent on one of the homes in the next 3 months. I have accumulated $8k in credit card debt the last 2 years trying to leverage my finances to afford both houses. I will be able to pay the credit card off with my bonus, but I know that I probably need a credit card more than a credit score right now, so it is probably better to default on the house than max my credit card out. My fiancee wants to move out of state in 3-4 years. I do not want my credit issues to become hers when we get married.

What is the best course of action for me? Do I walk away from the investment home #1 and keep paying on home 2 because I will be able to sell it for a profit in a year or 2? Are there steps my fiancee and I need to take with this before getting married so that we can keep her credit score good if I choose to walk from home #1? The bank won't offer any advice until I default, but I fear by that time, my credit will already be suffering.

Any advice is greatly appreciated.

Thanks.

adonis · Posted: Sun Jun 13, 2010 8:25 pm Post subject:

Hi tluke,

Your fiancée's name is not mentioned on the property#1 which is your investment property. If the property is foreclosed upon by the lender, then her credit score or report won't get affected.

Rather than walking away from the investment property, I would suggest you to contact your lender and apply for a deed in lieu of foreclosure. This will not only help you in getting rid of the property but you won't be liable for the deficient balance as well.

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