Posted on: 09th Oct, 2009 06:21 pm
If there is anybody out there who can give me some advice, I'd greatly appreciate it. I'm spoken to lawyers, loan offers, realtors and everyone in between but don't feel like I'm getting anywhere. The story goes...
Back in '04, amidst the refinance/mortgage boom, I purchased a condo in metro-Detroit for myself, my finance and soon-to-be newborn son. With a belief that this would be a starter home that we'd live in for 3-5 years, I naively fell right into the trap. With A+ credit, the bank had no problem righting me a mortgage that was well within my budget.
We lived happily in the home for 3 years but due to the collapsing economic conditions of the region, I was forced to seek employment elsewhere and in September of '07 we relocated to Central Florida. Seeing as how I was already upside-down and the housing market had already begun to crash, despite my efforts I was unable to sell the home at the time of our move. I sat on the home for two more years, managing to keep the mortgage current with the help of some rental income. That pretty much brings us to date.
As of this summer, with literally no assets to my name, I've run out of cash and have no means to continue to pay the mortgage. I been working with a realtor to get an offer so I can apply for a short-sale, but the market in metro-Detroit is so horrific, that despite having the home listed at less that half of my mortgage balance, I haven't even got a phone call in the 2 months it's been listed. As the sole bread winner of a family of five now, barely making it month to month, this condo is eating me alive. My savings is gone, I can't sell it, and I'm being open, forthcoming with my bank. My bank however is being uncooperative, rude, and is treating me as though I'm a criminal.
My next step if I can't find a buyer is to apply for a Deed in Lieu, or other than that, I can just throw my hands in the air and foreclose. I'm concerned that if I go the Deed in Lieu route, I'll get a 1099 and will owe a debt in taxes that will take me a decade to pay off. I literally have no assets to my name aside from a $2000 in stocks, $10,000 in a 401k, and this condo that is upside-down about $70,000+.
Now that I've cried a river, I'd like to ask a question to an expert out there. Seeing as how my credit was A+ until about a month ago when I started falling behind on the mortgage, should I just foreclose and begin rebuilding my credit immediately? A short sale doesn't seem likely before I fall seriously behind on my mortgage, a Deed in Lieu may cost thousands in taxes that I can't pay. I'd have to file bankruptcy if the bank came after me.
Am I wrong? Am I just going delirious from the lost sleep and anxiety? I'm trying to do the right thing but it doesn't seem to be working. I really need some advice.
Thank you.
Back in '04, amidst the refinance/mortgage boom, I purchased a condo in metro-Detroit for myself, my finance and soon-to-be newborn son. With a belief that this would be a starter home that we'd live in for 3-5 years, I naively fell right into the trap. With A+ credit, the bank had no problem righting me a mortgage that was well within my budget.
We lived happily in the home for 3 years but due to the collapsing economic conditions of the region, I was forced to seek employment elsewhere and in September of '07 we relocated to Central Florida. Seeing as how I was already upside-down and the housing market had already begun to crash, despite my efforts I was unable to sell the home at the time of our move. I sat on the home for two more years, managing to keep the mortgage current with the help of some rental income. That pretty much brings us to date.
As of this summer, with literally no assets to my name, I've run out of cash and have no means to continue to pay the mortgage. I been working with a realtor to get an offer so I can apply for a short-sale, but the market in metro-Detroit is so horrific, that despite having the home listed at less that half of my mortgage balance, I haven't even got a phone call in the 2 months it's been listed. As the sole bread winner of a family of five now, barely making it month to month, this condo is eating me alive. My savings is gone, I can't sell it, and I'm being open, forthcoming with my bank. My bank however is being uncooperative, rude, and is treating me as though I'm a criminal.
My next step if I can't find a buyer is to apply for a Deed in Lieu, or other than that, I can just throw my hands in the air and foreclose. I'm concerned that if I go the Deed in Lieu route, I'll get a 1099 and will owe a debt in taxes that will take me a decade to pay off. I literally have no assets to my name aside from a $2000 in stocks, $10,000 in a 401k, and this condo that is upside-down about $70,000+.
Now that I've cried a river, I'd like to ask a question to an expert out there. Seeing as how my credit was A+ until about a month ago when I started falling behind on the mortgage, should I just foreclose and begin rebuilding my credit immediately? A short sale doesn't seem likely before I fall seriously behind on my mortgage, a Deed in Lieu may cost thousands in taxes that I can't pay. I'd have to file bankruptcy if the bank came after me.
Am I wrong? Am I just going delirious from the lost sleep and anxiety? I'm trying to do the right thing but it doesn't seem to be working. I really need some advice.
Thank you.
Thank you adonis,
My problem is that since I moved to Florida 2 years ago, the Mortgage Forgiveness Debt Relief Act that would relieve me of my 1099 may not help since this property is no longer my primary residence. Since I moved (for the sake of getting a job), the property is now considered an "investment" property... I know this because I've been denied the opportunity to refinance for this reason. Nobody will really help me because I don't really live there anymore. I don't own anything else, so it's not like I'm going around buying houses.
I'm actually considering having my wife and kids temporarily move back into the condo for a short period so i can claim it's my primary residence... leaving me behind in Florida. This is the last thing I want to do, but I'm clearly getting desperate.
Thank you sincerely for responding. You have no idea how meaningful educated responses are to me. Thank you!
My problem is that since I moved to Florida 2 years ago, the Mortgage Forgiveness Debt Relief Act that would relieve me of my 1099 may not help since this property is no longer my primary residence. Since I moved (for the sake of getting a job), the property is now considered an "investment" property... I know this because I've been denied the opportunity to refinance for this reason. Nobody will really help me because I don't really live there anymore. I don't own anything else, so it's not like I'm going around buying houses.
I'm actually considering having my wife and kids temporarily move back into the condo for a short period so i can claim it's my primary residence... leaving me behind in Florida. This is the last thing I want to do, but I'm clearly getting desperate.
Thank you sincerely for responding. You have no idea how meaningful educated responses are to me. Thank you!
Another question: I purchased this condo before I was married and my wife's name/signature has absolutely nothing to do with this property. Since we're married now, will her credit be affected?
Nope. If her name is not on the mortgage, here credit shoudl not get affected
I think your option to convert your house in to a primary residence from investmnet is a good decision
It will probably help you to aviod the taxes
I think your option to convert your house in to a primary residence from investmnet is a good decision
It will probably help you to aviod the taxes
This property was my primary residence for several years.... but since I now work in Florida, there is really no way I can actually move back in and technically convert this property into my primary residence. As far as paperwork is concerned, I could claim it is however.