Can't Get Out...Bad Situation!
I have posted several topics regarding this particular property that I purchased in 2002 from a shady mortgage company and a shady seller. I took some of your advice to report it. I did - and nothing happened. The major problem is that I am still stuck with a property that is worth much less than what I owe. The building is structured as a 2-flat, but a SFR on record. I have been quoted that it will need at least $30K to bring it back to life, or at least, get it rented. It has been vacant for 2 months and I honestly cannot afford the mortgage anymore. I refinanced it in June and took another wrong turn. I thought I would have been able to sell it with offering cash back, but no one picked it up. I owe $112K and the properties (average condition) in the area for a SFR frame are about $120-125, and for 2-flats about $145-160. Just recently I had a vandalism occurence, which my insurance did not cover. The property is salvageable, but not rentable at this time. No one will buy it for what I owe. I do not have any money to offer with the property as an incentive. I have ran out of options. I feel like there is no where to turn. Someone mentioned to me about Short Sale a couple of times, but I passed on the idea, because I am afraid that my very good credit will be ruined. My question to you all is: What can I do with this property that I own without hurting my credit - Quickly!? I only have one month reserves left for the mortgage payment.still :-?
How did you refi a home in need of 30k in repairs?
If you pulled out cash why did'nt you make the repairs to get tenant in (monthly cash flow) to cover the new mortgage payment? It seems like you made a bad situation worse by refinancing and adding more $$$ to the loan and without doing the necessary repair work to be able to rent! I am sorry to hear about your situation but you still have a few options!
1.) Ask lender @ Deed in lieu of foreclosure.
You may be able to deed the property back to the bank,
but because you are not deliquent you MUST have a very compelling story to tell (put on paper) them about your misfortune.
2.) Ask lender to do BPO for short sale approval.
If the property is as ragity as you say, then the BPO should reflect a lower value.
3.) Put home on market for a price that will move it right away (85-95k) for investor to purchase and do rehab. Make sure listing states that deal is subject to lender approval!
The bottom line IMO is that you must INCLUDE the lender in this process, you will see that they do not want to own (foreclose) the property, rather find an amicable solution to this situation for all parties involved. Unless of course you yourself participated in the fraudelent acts that were perpetrated and are hiding something from them. In that case apply for short sale and blame the former tenants & vandals for destroying the place.
Good luck!
Will a short sale hurt my credit? And will it hurt my chances of investing in the future?
If you made bad decisions and you want to keep your good credit then you'll have to bite the bullet on this and do what you need to do. Take out a loan on your primary residence to pay the deficit from whatever you are able to sell the problem property for. People with good credit have good credit because they believe it's important to 'pay as agreed'. Don't make your problem the lender's problem- unless you have legitimate reasons for your situation (health problems for instance). Shift the resulting debt somewhere else and either make it up on your next deal or get a second job to pay it off if you've found real estate isn't for you.
What is a short sale?
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missjohnson,
What are the rents in your area for your type of property?
Robert Taylor
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I do not have a primary residence that I can borrow from, but I do have a couple of upcoming projects (rehabs).
The rents in the area: For a 7 bedroom home can be rented sec. 8 (approx. $1800). For a 2 flat, 4 bedrooms, sec. 8 ($1400), 3 beds (1250). I cannot rent it out at all right now, unless I can find a handyman who is desperate and has no other place to go.
On 2004-11-17 01:05, missjohnson wrote:
Will a short sale hurt my credit? And will it hurt my chances of investing in the future?
Ms. J, you really have me confused !!! If you were already defrauded once, why in the world would you want to keep doing down the same road??? Do yourself and your kid(s) a favor and order the short sale package from your lender to get the process started. I don't really think you are understanding the consequences of Fraud! Get out of this situation as quickly as you can and worry about your prscious credit rating later! 700+ credit does you no good in the Metropolitian Correction Center, now does it!!!
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