Posted on: 25th Feb, 2008 11:25 am
After almost 13 years of marriage my husband has decided that he no longer wants to be married. We have 2 children, a lot of unsecured debt and a home with no equity.
We currently owe $166,000 on the property and I have talked with a realtor, which due to market conditions and a recent sale of a forclosed house across the street, our value is at most $165,000. I cannot afford the monthly payments on my own and neither can he.
My question is should I do the repairs that the Realtor has suggested and list the property in hopes of getting our second mortage lender to agree to a Short Sale? or should I just let it go into foreclosure? No sure if it matters, but the first loan is a VA home loan?
If we try a short sale, what are the chances that the second lender will come after me (and or him) for a deficency judgement?
I know either option is going to kill my credit but by the end I am going to be forced into bankruptcy anyway.
Any advice is much appreciated.
We currently owe $166,000 on the property and I have talked with a realtor, which due to market conditions and a recent sale of a forclosed house across the street, our value is at most $165,000. I cannot afford the monthly payments on my own and neither can he.
My question is should I do the repairs that the Realtor has suggested and list the property in hopes of getting our second mortage lender to agree to a Short Sale? or should I just let it go into foreclosure? No sure if it matters, but the first loan is a VA home loan?
If we try a short sale, what are the chances that the second lender will come after me (and or him) for a deficency judgement?
I know either option is going to kill my credit but by the end I am going to be forced into bankruptcy anyway.
Any advice is much appreciated.
I personally always think that it is worth it to try before giving everything up. If the realtor sounds like they know what they are talking about, maybe it is worth a shot. I would get a market analysis from several agents just in case to get a consensus on the value.
Best of luck and let me know if you have any questions along the way.
Best of luck and let me know if you have any questions along the way.
Hi Khill,
Welcome to our forums.
I shall agree with Eric here. If you think it's worth going for the repairs and you'll bge able to recover much of the debt through the sale proceeds, then go for the repair. Then you can talk to the first lender and discuss why you cannot repay the loan and say that you wish to do a short sale.
Alternatively, you can talk to the lender first and find out if he can suggest any aletrnative repayment plan or other options as given at http://www.mortgagefit.com/foreclosure/17ways-avoid.html . Then you may ask for a short sale.
If the lender approves a short sale, the second lender may ask for the payment of the unpaid debt but you have no option but to pay off the first and then if there's anything left out, it should go to the second. However, if you can't pay the second lender at all, he might charge off the debt.
Good luck
Welcome to our forums.
I shall agree with Eric here. If you think it's worth going for the repairs and you'll bge able to recover much of the debt through the sale proceeds, then go for the repair. Then you can talk to the first lender and discuss why you cannot repay the loan and say that you wish to do a short sale.
Alternatively, you can talk to the lender first and find out if he can suggest any aletrnative repayment plan or other options as given at http://www.mortgagefit.com/foreclosure/17ways-avoid.html . Then you may ask for a short sale.
If the lender approves a short sale, the second lender may ask for the payment of the unpaid debt but you have no option but to pay off the first and then if there's anything left out, it should go to the second. However, if you can't pay the second lender at all, he might charge off the debt.
Good luck
Hi Khill,
good to have you here.
First of all - i am really sorry for your situation. I hope that things will work out between you guys:)
But if not then i think it will be very expensive to sell property and then buy 2 separate ones. You will have to pay to agents ,brokers etc.
What about one of you buys yourfelf a new one and then another can stay where you are and get a tenant?
Riko
good to have you here.
First of all - i am really sorry for your situation. I hope that things will work out between you guys:)
But if not then i think it will be very expensive to sell property and then buy 2 separate ones. You will have to pay to agents ,brokers etc.
What about one of you buys yourfelf a new one and then another can stay where you are and get a tenant?
Riko
if you do go through the short sale, you may be liable for taxes on the difference between the home's appraised value and what the lender let it sold for.
usually lenders do not go after you in a deficiency judgment because they know you have no money, and it costs them a lot of money to take you to court. why sue someone who can't pay?
you can seek the court protection and delay foreclosure for the next 6 months. meantime you can save for an apartment or to get your finances in order.
keep in mind that if you foreclosure on this governemnt loan, you will probably not qualify for another government loan in the future. if you are trying to decide between bankruptcy and foreclosure there are several facts that you should keep in mind. both will significantly lower your credit score by 200 to 300 points. a foreclosure will stay on your credit report for 7 years, chapter 7 bankruptcy will remain for 10 years, and chapter 13 for 7 years if you follow the agreed upon repayment plan, 10 years if you do not.
usually lenders do not go after you in a deficiency judgment because they know you have no money, and it costs them a lot of money to take you to court. why sue someone who can't pay?
you can seek the court protection and delay foreclosure for the next 6 months. meantime you can save for an apartment or to get your finances in order.
keep in mind that if you foreclosure on this governemnt loan, you will probably not qualify for another government loan in the future. if you are trying to decide between bankruptcy and foreclosure there are several facts that you should keep in mind. both will significantly lower your credit score by 200 to 300 points. a foreclosure will stay on your credit report for 7 years, chapter 7 bankruptcy will remain for 10 years, and chapter 13 for 7 years if you follow the agreed upon repayment plan, 10 years if you do not.
Hi imdcorp,
Welcome to the forum.
Great info. It seems your are knowledgeable and you can help people with your sound knowledge and helpful information.
Why don't you introduce yourself to this community and let others know about you at http://www.mortgagefit.com/introduce-yourself.html
Hope you will enjoy participating here :)
Best of luck,
Larry
Welcome to the forum.
Great info. It seems your are knowledgeable and you can help people with your sound knowledge and helpful information.
Why don't you introduce yourself to this community and let others know about you at http://www.mortgagefit.com/introduce-yourself.html
Hope you will enjoy participating here :)
Best of luck,
Larry