Posted on 10/05/2009 2:41:13 PM PDT by Kartographer
Yep. The really nice house across the street from me is in foreclosure after they couldn’t short-sale it. The divorcee owner comes by to pick up her mail in a brand new Lexus every now and then.
The only thing worse than being $100K upsidedown in a home you can’t afford, is being foreclosed and still owing the $100K differnce. Glad I’m in good shape.
We tried to buy a short sale...it was an exercise in frustration...this particular lender also wanted earnest money from us (not a lot but 500 bucks which they kept way past the date the contract was voided by their failure to agree to the terms.) We ended up buying a foreclosure the day after it hit the market, and we had closed within a couple weeks.
I am $400K upside down. Tried a short sale, it was denied. So I paid it off. Now I am broke.
It wasn’t a matter of affordability. My house fell from $900,000 to $400,000 wiping out my $100,000 downpayment. I drive a VW, not a Lexus.
In California, I think a Deed in lieu of forclosure might be a way to go. As I recall, that type of deed exonerates (first mortgage only, not other liabilities) first mortgage differences between what is owed and the current value of the house.
Check it out with an attorney.
bump
short sales were generally a rip off.
They owners are better off filing a bankruptcy and staying in the home as long as is allowed by law or practicality.
What is really stupid is that banks will not short sale to the owner in order to perfect the lost promisory notes.
Get the waaaaaambluance. Not everyone should own a home.
In some areas short sales are setting market price and killing JQ Public’s market value.
The issue is that the balance gets 1099’d as income EXCEPT if it is in bankruptcy.
You in California?
Basically I have learned from this episode....I will never move there no matter how much Arnold gets on TV.
It isn’t your fault though....sorry you endured that.
You should have walked away from the mortgage. The last thing you shopuld have done was pay it off.
Me too.
Love the Dave Ramsey quote, “The paid off home mortgage has taken the place of the BMW as the status symbol of choice.”
I definitely agree with this article.
I have been trying to sell the house I am in since May of 2006. My wife had to move out of state because of her job and I stayed here to sell this house.
It’s been over a year now since we have been apart. And let me tell you it has been a HORRIBLE exercise in frustration.
We started out around 220K which is what it was appraised at. It was nothing but chase the market and get bad advice from the realtor. Now Finally we are close to a closing at 80K. Definitely upside down on what I owe.
And the short sale was my final option and that started back in late April of this year. I sometimes feel like the bank has this timer on when to do things at the last moment.
Oh yeah, I almost forgot this one. I got a call a work on a late Wednesday afternoon. The bank had some more paperwork that the Buyer and I both had to sign. And if it wasn’t on the bank negotiator’s desk by noon on Friday, well then they would just close the case and we would have to start all over again. Well we made it but my realtor ended up sending the paperwork by both e-mail and Fax to the negotiator’s office. And we sent it to the negotiator’s boss too, just to be sure that it was properly received.
Wish me luck! Closing is around the 23rd of October.
We bought our home from someone in that situation. It was a shortsale. I'm sure they couldn't file for bankruptcy because they would lose their security clearance. They were in an impossible situation.
But why did you have to move?
Most don’t have that. Primary residence loans are usually non-recourse.
However, that does not include rentals (investment property). Look up IRS form 982. If you have low assets and high debt, you may be able to avoid the tax, even on rental properties. See a tax attorney and don't take some guy's word for it on the internet.
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