| Looking for advice on mortgage |
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brokeinma
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Joined: 14 Mar 2011
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| Looking for advice on mortgage |
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Here is the situation I am in... I have a mortgage on a condo which has a balance of 131000 at 6.25 % and a second home equity at 13,500 at 4%. The mortage, condo fees, taxes and misc expenses come to $1300 a month. It is currently renting for $1100 a month, and the tennant is planning on moving at the end of next month. I will be lucky to get $950 a month on the next tennant, which puts me at a huge loss per month. The townhouse is worth about 115,000. I have tried to get a loan modification from ING, and they are impossible to work with on modifying my loan. The loan is a 7/1, and the rates with jump in 3 years above what I will be able to afford, and if the house goes vacant, I will not be able to afford the bills.
We own another house with a mortgage of 119,000 and expenses are $950 a month including taxes, and don't want to sell the house and move into the condo, as we have two large dogs, which will create a problem for surrounding neighbors. This house is worth about 135-140,000.
I have never been late on a payment on either house, and would love to get rid of the condo, but it is worth almost 30k less than what I can sell it for. My question is, if I can't rent the condo, would I be better off letting it go into foreclosure? If the bank agrees to short sell it, can they go after my retirement assets. I have approximately 60k in a 457B plan that I don't want to borrow against to sell the house. The mortgage company (ING) and my 457B plan are unfortunately the same company. Do they have the right to take the money out to pay off the short sale of the house without consent? Would I be better off trying to rent at a $400 loss per month, short sale, or let the condo into foreclosure?
If I do short sale, what other assets can the bank go after?
I live in Massachusetts.
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Tue Mar 15, 2011 12:07 am |
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Offshore-Wealth.com
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| SHORT SALE VERSES DEFAULT FORCLOSURE |
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Interesting,
Sadly, you are stuck in the same position as millions of others, so my best advice would be to take the few hundred dollars in loss by renting the condo again and hope for market to turn around. You may have to wait several years as I see market, so with your 7 year arm, you may end up in same situation at the adjustment period when your monthly expense jumps. Waiting it out is a gamble, just as keeping your job may be, so waiting it out would be my suggestion.
As to short selling, yes, you will end up owing money, but as to how and when it will be paid is up to you. Depending on who holds mortgage, which most banks cannot identify, I would look at having someone do a forensic analysis of your current mortgage. What most don't realize is you may have a fraudulent mortgage, and with many technicalities voiding mortgage in the eyes of law, you may have more leverage than you think. In short, if your mortgage is indeed valid, more than likely it was sold off in the great mortgage fraud derivitive market, so I doubt your bank can prove who holds mortgage, and many people have had judgments and foreclosures thrown out for this very reason, so this puts you in the power position over the bank.
Simply put, research this before making a decision. You could easily end up with a deal of a lifetime, a debt free home like thousands of others have already proven in court. If a bank cannot provide original signed documents, as well as clear ownership of mortgage, you are home free. [edited to remove solicitation & url]
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Tue Mar 15, 2011 8:19 pm |
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oldguy
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quote:
I have tried to get a loan modification from ING, and they are impossible to work with on modifying my loan.
ING is correct, loan mods are for your residence only, they cannot be applied to rental properties/investments.
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Wed Mar 16, 2011 7:25 pm |
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buziness2011
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My advice, find an attorney who knows this subject inside out and find out if you can really forclose the condo without worrying if bank will go after your other roperty. Then if u are sure that youc an, then forego the condo and keep the house.
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Fri Mar 18, 2011 6:38 am |
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brokeinma
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Thank you for the tips. I will seek advice from a professional before I make any major decision, and have the mortgage looked at.
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Sat Mar 19, 2011 1:48 pm |
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brokeinma
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quote:
Originally posted by oldguy
quote:
I have tried to get a loan modification from ING, and they are impossible to work with on modifying my loan.
ING is correct, loan mods are for your residence only, they cannot be applied to rental properties/investments.
You are correct there, but they have no idea that I am not living there. The mortgage is still billed to the condo, and I told them I am still living there as my principal residence.
Not sure if this was a great idea or not, but they did offer somewhat of a refinance. I paid them an $850 fee + $1400 (the $1400 goes entirely towards the principal).
It also renewed my 7/1 arm for another 7 years, and dropped the interest rate from 6.75 to 3.75 for 7 years. It is somewhat similar to a loan modification, except maybe a little bit higher on the fee.
It dropped my mortgage from 850 a month (before condo fees and taxes) to 650 a month. The $850 I will lose will be made up in 4 months in saving on interest.
Now I can afford to rent it out and continue trying to pay down the mortgage, and hope the market starts to recover within the 7 year time frame so I don't have to foreclose.
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Sat Mar 19, 2011 1:56 pm |
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Rhino241
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Always good to talk to a proffessional in thoose cases
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Sat Mar 19, 2011 5:45 pm |
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oldguy
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quote:
but they have no idea that I am not living there. The mortgage is still billed to the condo, and I told them I am still living there as my principal residence.
Not sure if this was a great idea or not, but they did offer somewhat of a refinance. I paid them an $850 fee + $1400 (the $1400 goes entirely towards the principal).
Wow - fraud has some serious penalties (jail time?), are you sure that you know what you are getting into? As a minimum the lender will call in the loan in full when you get busted.
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Sun Mar 20, 2011 1:03 am |
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brokeinma
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This is totally on the up and up. I was thinking on trying to find a way on qualifying for the loan mod, which you do have to live there.
The program I signed up for is a different program they offer for even if I am not living there. I was honest, and told them I was not living there right now. They don't call it a loan modification, it is basically a refi, even though I don't have 20% equity. They dropped my rate from 6.75 to 3.75 on my 7/1 arm, and renewed the arm so I wont have to worry about the points jumping up 4 points in 2 years. That is where my origonal arm would have expired. This should save me $16k over the life of the new 7 year arm.
We are putting our other house on the market, and going to move into to the condo until we can pay it down. We have enough equity in the current house we are living in to sell and should make pocket some money.
My mortgage, condo fees, and taxes will drop from approx 1100 a month to less than 900. When we move closer, it will also cut my commute down from 80 miles a day to work (with a truck) down to 15, saving a bundle a month on gas.
I will use the money I save on gas to pay down the mortgage. All is good, thank you all for the advice.!
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Sun Mar 20, 2011 10:53 pm |
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LindaPH2010
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| I agree with you. |
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That sounds like a good plan.
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Mon Mar 21, 2011 9:36 pm |
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cashloon
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My landlord owned to houses by different banks and he foreclosed the other house coz of late payment, however, he was able to keep the other house. That means, even if you foreclose the other house doesnt mean the bank can go after your second property.
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Thu Mar 24, 2011 8:46 am |
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littleroc02us
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Majority of houses that foreclose have a mortgage on them. 
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Thu Mar 24, 2011 3:43 pm |
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vaultwholesale
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Yeah, mortgages = death. They are essential but many times the homes will foreclose and it is hard to get economic stimulus right now in the form of mortgages so keep that credit score prestine and mean
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Thu Mar 24, 2011 6:48 pm |
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