[Carlos Arango]

Hi: I have an apartment in Miami and I can not make payments anymore, I refinanced it sometime ago to afford making the payments but I run out of money and I have no job or income of any kind.
If the bank foreclosure the apartment are they going after me for money if they sell the apartment for less money that I owe? The apartment is worth $700,000. And I owe $700,000.

Thank you for your response.

[excon]

Hello Carlos:

In a nutshell, yes. You are obligated to pay the loan no matter what the value of the property is. If they sell it for less, then you'll be liable for the difference, plus costs.

excon

[CaptainForest]

What I would suggest is you try and sell the property on your own, because you might get a higher price than the bank might get, therefore costing you LESS money in the long run.

[ScrewedOverManyTimes]

I do mortgage. Did you try refinancing again? There are lenders who deal with property in foreclosure. You will not be happy with the rate or payment, but You will at least get to keep the property until it has gained more equity.

[Carlos Arango]

Thank you. I owe to the bank what the property is worth rigth now.I owe $700,000. And the property's last appraisal was $710,000. At this point, I have still some money from my last re-fi to pay the mortgage for a few months, the problem is that there is a lot of inventory in the area where the apartment is and this is making very difficult to find a buyer or a tenant.
On the other side, if I find someone interesting in buying,I'm going to have to deal with the capital gain with the IRS, I bougth this apartment originally for $450,000. And I refinanced $700,000. I had about $30,000. In expenses and I had put in my pocket the rest of the money, but I have being using this money to pay the mortgage and financing myself, since I have no other income.(no job).

Thank you very much for your ideas, Carlos.

[Fr_Chuck]

I will say this, if the bank takes it back, they may let it go for a very low sum, In the case of the last property I bought the appraised value was over 120,000 and I got it close to 60,000. It was a foreclosure that had went though bankruptcy.

In their case, since they filed bankruptcy they won't owe the balance, but had they just did a foreclosure they would have owed the 60,000 that was not gotten by the bank.

So yes if you ow 700,000, and they spend 50,000 in selling costs and only get 500,000 you would still owe the 250,000.
so often if you owe a amount and can find a buyer for lets say 600,000, some banks will let you have a personal loan for the rest. They do this since they know they are going to most likely loose money anyway, and it is better to try and work out the best deal possible.

But of course the real issue will be finding a job and getting income.

[s_cianci]

If they are unable to sell it for a sufficient amount to satisy the debt then they'll probably come after you for the difference.

[Carlos Arango]

So, the worse of the situation,would be that the bank reposess the apartment and sell it for any money that they can get; Then, they are going to try to get the rest of the money from me. At this moment is when I should go in bankruptcy? What about the IRS on the capital gain?

[Fr_Chuck]

Are you single or married, how long have you lived in the apartment

if married and you live in it for 2 of the last 5 years you can get an exemption of up to 500,000 in profit, 250,000 exeption if single or not filing jointly. If you supply more details I can give you more info

and it will be on the profit of the sale, of if you look at your adjusted basis of the value of the property ( purchase plus improvements but costs minus depreciation) to the sale price, It is fully possible that the sale price could be less than your purchase price if it is sold at foreclosure.

[Carlos Arango]

Hi Chuck: I'm married and I don't live in that property, I re fi my house to purchase this apartment as an investment less than 2 years ago. However, the apartment has been very much vacancy all this time and I don't think that I can afford to make this payments for more than 3 or 4 months.

[Jeremiah49]

Hi: I have an apartment in Miami and I can not make payments anymore, I refinanced it sometime ago to affort making the payments but I run out of money and I have no job or income of any kind.
If the bank foreclosure the apartment are they going after me for money if they sell the apartment for less money that I owe? The apartment is worth $700,000. and I owe $700,000.

Thank you for your response.

The bank doesn't forclose you do,but they repo it,and if they can't sell it for what you owe you owe what the difference is,my advice is for you to forclose it because then your free and clear or refinace with bank of america