How Would You Handle This?
I have also suffered the hardships of the real estate market. I have a lot that 330k is owed on that is worth about 50k now. I have over 120k in it the last 3 years. Its been in default since June. The bank is ready to foreclose. I’ve had it listed for shortsale and no bites. The best at this point the bank has offered me is a deed in lieu and they want to put a 180k lien against another property I own. (My house) They wont write anymore off and are not willing to do anything else.
Here is where it gets worse.
There has been so many foreclosures in my area. My house which I owe a total of 1,275,000 on (1.2m first 75k equity line) is now worth probably 700k. (-600k) If they put that lien on top of the house it will be an additional $1200 a month. I am almost certainly going to have to give up the house soon (haven’t missed a payment yet). The bank that wants to put the 3rd lien on the house also has the the 2nd lien the equity line.
How difficult is this going to be to do a short sale with the bank having a 2nd and 3rd lien?
Is it a better situation if they put the lien on the house and then if I foreclose on it, its my primary residence and the debt would be forgiving?
I know I’m screwed either way. That is all the property I have in my name. Any other advice on handling this situation?
thanks!
bankruptcy. draw a line in the sand, and walk away.
I dont think the banks will forgive under these circumstances. 330k down to 50k, 1.2 mil down to 700k, thats not the housing crisis, which would account for 20-25% drop. Something else is going on with the cash out or home equity lines, its clear that some apprasial hanky panky was involved.
Therefore, even after forclosure, they will still try to attach the remaining balance to any item of value you have listed in your name, even if its joint with a wife or business partner.
I dont a forclousure will hurt you anymore, so let both properties go. But to answer your question, i dont think a forclosure will their right to collect damages. I also think you are way out of short sale possibilities,your write offs would be too extensive for the bank to seriously consider. IMHO
Quote:
On 2008-10-18 00:20, rglover548 wrote:
I dont think the banks will forgive under these circumstances. 330k down to 50k, 1.2 mil down to 700k, thats not the housing crisis, which would account for 20-25% drop. Something else is going on with the cash out or home equity lines, its clear that some apprasial hanky panky was involved.
Therefore, even after forclosure, they will still try to attach the remaining balance to any item of value you have listed in your name, even if its joint with a wife or business partner.
I dont a forclousure will hurt you anymore, so let both properties go. But to answer your question, i dont think a forclosure will their right to collect damages. I also think you are way out of short sale possibilities,your write offs would be too extensive for the bank to seriously consider. IMHO
The lot I purchased in 05 for 380k I had a baloon up on it this year. I say 50k but it may appraise for 80k but 50k seems what the going rate is in the market right now. I put alot of money into it in 3 years but i will never recover.
The 20-25% may be normal is markets but FLA has suffered much more. I did refi the house once to pull cash out to carry other properties and hoped i can make it thru to break even on the house but that wont happen. It got even much worse after that. Now hardly anyone qualifys to purchase anything.
Is this a good enough reason to hold investment properties in some form of entity, that it can go BK w/o affecting the personal assets?
I am a former lending executive, and in the last 5 years, 99% of residential loans were made non recourse. They will not and cannot lien another property because you default. They may go after a deficiency judgement, or try to get a promissory note, but that is all they can do. Unless you sign some sort of guarantee and cross collateralize other property, which is common on commercial loans.[ Edited by ICGPROPERTIES on Date 11/23/2008 ]
I have never seen the term recourse or non-recourse use in residential mortgages.
purchase money v. non-purchase money are the distinguishing point as to whether the there can be a deficiency judgment to collect.
This is CA anyway.
On commercial loans, I have seen additional clauses such as recourse to the entity, to the principal, partial recourse, and no-recourse.
Then there can be a personal guarantee.
This was a very difficult concept for me to grasp.
sometimes the terms are not specifically called out in the note, but are the state laws.
I have researched this quite throughly for CA, and still have questions at times.[ Edited by cjmazur on Date 11/24/2008 ]
They want me to send the warranty of my primary into them so they can put a 180k lien on it for the loss of the lot.
They want me to take a deed in leiu.. Of the 330k owed
1. Forgive 60k
2. Credit 90k
3. Place 180k on my house...
I cant see how that is a good deal for me.. Its still a foreclosure, and I have 180k against my house which i will end up losing anyway.. But that 3rd lien may screw up a chance at a short sale. I should just let the bank foreclose and let them spend the extra money because I have no chance of paying it back.. If I have to file BK I dont see a difference. Things are not getting better.