[roymcd]

My wife and I recently purchased a new home and rented out our original home... within a few weeks the renters left... we are now stuck with a 1st and 2nd on the first home and a new mortgage on our new home... the first home is maxed out on equity... we can't afford a 1st and 2nd and our newest mortgage.. however we can afford our current mortgage... the first house won't sell enough to get us out from under it esp with the 2nd hanging on... we have no choice but to let the first go... we got some bad advice and now we are paying for it... what happens if we walk away from the first?. I know our creidt will be adversely affected.(7-10)... how can we come out of this with a fresh start..?. my wife and I both work full time so we can survive and be OK but we don't know what to do at this point... weve heard of several options but don't know if that's more bad advice... example (1) "Deed in Lieu"... (2).. walk away(I guess that would be the same as just not making payments and letting it foreclose)... (3) short sale(dont know what that is)... anyway thanks for your help.. you guys on here seem like you know what you're talking about... oh Im pretty sure well need to see a real estate attorney.. we have thought about that... thanks again R and A

Thanks for the reply Chuck... Is bankruptcy an option?. What about "Deed in Lieu"..

Can they take our 401k?.

[Fr_Chuck]

Hello, how about selling your 2nd house and renting something cheap while you work on selling your first house ?

And of course one has to ask why you bought a home ( 2nd home) when you could not afford it, since you still owed on your 1st home.

Ok, first renters moved out, you rent it out again, I have some homes that I rent 3 or 4 times a year, as renters come and go, and others that may rent for several years to one person. Make them sign a longer term lease and if they move out, they lose their deposits basically over future rents.

But if you let your 1st home forclose and they take it back, what happens, is they sell it, often at auction, where it sells for less than value ( often to the lien holder) So after it sells, normally it does not fully pay the 1st mortgage and pays nothing on a 2nd mortgage. So guess what you still owe all that difference. You may end up owing 1000's or 10's of 1000's on a house you no longer own. ( this is basically where you are "short" in that it sells for less than is owed)

So you need to work out selling your 1st home, even if you have to sell for less than is owed and work out a payment plan with a lien holder on the balance.

Remember if you end up oweing 1000's on the old house, and they come back and garnish your wages, or maybe put a lien on your new home, they can make life bad quickly.

[Fr_Chuck]

I have merged all of your separate posts, please when following up on a post, merely add it as a reply to your original post. If you don't, most can't connect your separate posts.

Yes bankruptcy is an option, normally the 401 should be safe,
I am not a real esate attorney and each state has its own rules.
A visit to a local attorney is a good idea.