Foreclosure advice needed
Question: I currently own a home in PA- and renting in FL where I now work. I have been trying to sell my PA home now since January and have come down from 169 to 139 with no offers (I originally bought at 145). I currently have a first mortgage of 120000 and second mortgage/line of credit at 43000 for a total of 163000. I believe I am in a situation now where I will have to foreclose (I cannot afford it anymore) and would appreciate any advice in this area- in particular:
1. I have the opportunity to refinance everything at $168000 so it would just be 1 mortgage that I would then foreclose on. Is it better to foreclose with the 2 mortgages as I have it now- or just 1. In particular I am wondering what the chances are of a shortage/ deficiency judgment and the liklihood that they will “come after me” for that amount. Is it more likely with the scond mortgage- or even with the refinanced?
I have to make this decision in the next couple of days so would really appreciate any advice in this area.
Answer: Thanks for posting the general location. That would be too far away from where I am located so it wouldn’t make sense for me. If it were closer, I would write and see if there was something we could work out.
I just noticed that your message is cross-posted on misc.invest.real-estate (I saw it on alt.bankruptcy), so maybe someone there will be from the SW Pennsylvania area and have an interest.
If you don’t find a buyer, you might want to think about doing a rent-with-option-to-buy or some other plan that would allow someone to buy your place at your price but their terms. I have a friend who does that with investment properties that he owns. His experience has been that people who do the rent/option approach tend to take care of the property and sometimes are people who want to be homeowners but do not yet qualify to buy a home. In your case, it might be a way to get someone into your property to cover the mortgages and who might end up becoming a buyer at a later date. Of course, being 1,000 miles away from the property is a big disadvantage. Have you considered hiring a real estate firm (many handle rentals) or a trusted friend or family member in the area and rent the house out for now? Until the market improves or it appreciates further it might give you a chance to keep up. You can also refi it as a rental property.
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