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    inaneninja's Avatar
    inaneninja Posts: 2, Reputation: 1
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    #1

    Jun 2, 2008, 05:47 PM
    Renegotiate loan / foreclose due to death in the family
    So here is the situation:

    In 2003 I co-signed on a loan with my mother to purchase a house (house#1)
    In 2006 I purchased a home of my own (house#2)and began living there with two roommates.
    In 2006 my mother was diagnosed with cancer
    In early 2007 I moved into my mothers residence(house#1) to be the primary care provider. My roommates continued living at my old residence(house#2)
    In late 2007 my mother died.

    So now I have 2 mortgages and had intended to sell the house(#2) I had purchased. Unfortunately with the market as it is I owe about 70k more than it is worth. So now despite being "responsible" and putting 100k down on the house and getting a 30year fixed I'm stuck with a house I can barely afford to pay the mortgage on.

    I wish to retain my mother's house(#1) as it is now my primary residence and another member of my family resides there as well. The lender for the house I purchased on my own(#2) has been fairly unresponsive to my questions so I need some answers.



    If I foreclose on the house I purchased (house#2) can the lender go after my assets (House #1, Car, what's left of my 401k)? I have finally burned through enough of my savings that I cannot afford both mortgages anymore and renting the second house covers only about half the mortgage.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,302, Reputation: 7692
    Expert
     
    #2

    Jun 2, 2008, 05:53 PM
    Well first you don't foreclose, they do after you stop paying for so many months. You can also try and sell it for a short sale, or see if you can rent it out for enough to cover the mortgage.
    inaneninja's Avatar
    inaneninja Posts: 2, Reputation: 1
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    #3

    Jun 2, 2008, 06:11 PM
    Quote Originally Posted by Fr_Chuck
    well first you don't foreclose, they do after you stop paying for so many months. You can also try and sell it for a short sale, or see if you can rent it out for enough to cover the mortage.
    My understand was that a short sale has the same negative impact on your credit, and since I live in CA... finding a buyer will be much harder than convincing the mortgage co to accept the shortsale.

    Currently the property is rented through a property manager by that gets me roughly have of the mortgage.
    Loan_Guy's Avatar
    Loan_Guy Posts: 83, Reputation: 6
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    #4

    Jun 2, 2008, 08:15 PM
    Quote Originally Posted by inaneninja
    my understand was that a short sale has the same negative impact on your credit, and since i live in CA... finding a buyer will be much harder than convincing the mortgage co to accept the shortsale.

    currently the property is rented through a property manager by that gets me roughly have of the mortgage.
    If a short sale is negotiated correctly, you may have little to no negative impact on your credit. A lot of it depends on the mortgage company and the person/company doing the short sale negotiation. You do need to prove that keeping the home is a financial hardship, but it sounds like you have that covered.

    It really sounds like that is your best bet right now, but I do not have all the info. It really does sound like you're burning through your savings by only covering half the mortgage.

    You need to take action quickly to avoid problems with your other obligations.

    LG

    PS. You could talk to a real estate agent who is experienced in short sales and see what they can do. I know of a company in LA that I have been talking to, but I don't know where you are in CA.

    PPS. Sorry about your Mom.

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