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purplecorazon · Joined: 17 May 2009 Posts: 2 2.80 Dollars($)

I bought a second home planning to move to that one. I was able to get an FHA loan. However, things changed and I ended up renting the property. I had a horrible luck with tenants. I have been making the payments out of my own savings hopping I was going to get better tenants next time. Unfortunately, I had to evict people from two units. One already left but I cannot get anyone to rent one unit, the second has not leave and I have to spend more money hiring a lawyer, so they can leave. The third unit, the husband and wife lost their jobs and now have not paid for two months.
I have no more money to pay the mortage any more all my savings are in that house because I did not want to default. I have a good credit, never defaulted on anything. This is making me sick. I have not equity in the house. I owe more than the value of the property, don't know what the gap is. My payments are current, but cannot pay any more
What can I do so it does not affect my credit that much? what are my options? Would a short sale or deed in lieu be the solution? how does it affect/help the fact that it is an FHA mortgage?

smithsussane · Posted: Sun May 17, 2009 7:22 pm Post subject:

Hi purplecorazon!

Welcome to forums!

You can definitely apply for a deed in lieu or a short sale but you should note that if the lender accepts any one of these options, then your credit will be badly affected. A deed in lieu will lower your credit score by around 250 points whereas a short sale will lower it by 75-100 points.

You may apply for a loan modification with your lender. This will help you in saving your property as well as your credit. However, as you are current on your mortgage payments, I doubt whether the lender would accept your request.

Feel free to ask if you have further queries.

Sussane

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Short Sale vs. Deed in lieu of foreclosure