Posted on: 18th Jun, 2009 02:17 pm
Hi,
I have a primary residence, then I purchased a three family home that originally was going to be my primary residence, so I got an FHA mortgage. Things did not go well, so I had to go back to my other home. I had a horrible luck with tenants and most of my savings have been used to keep up with the mortgage. Now, I owe the bank more than the house is worth. I try to do a short sale, but no offers yet and I cannot keep paying any more. Tenants do not pay and I even had to get a lawyer so people move out. This is taking too long also.
My question is, I have equity in my home where I live. Could I form an LLC, put the property in the LLC and then let it foreclose? can the bank go after my primary home and put a lien on it? I live in CT and I do not know the law.
I've been trying to find solutions, but because it is an investment home I do not qualify for anything. How does this affect my credit?
Any help will be greatly appreciated.
Thanks.
I have a primary residence, then I purchased a three family home that originally was going to be my primary residence, so I got an FHA mortgage. Things did not go well, so I had to go back to my other home. I had a horrible luck with tenants and most of my savings have been used to keep up with the mortgage. Now, I owe the bank more than the house is worth. I try to do a short sale, but no offers yet and I cannot keep paying any more. Tenants do not pay and I even had to get a lawyer so people move out. This is taking too long also.
My question is, I have equity in my home where I live. Could I form an LLC, put the property in the LLC and then let it foreclose? can the bank go after my primary home and put a lien on it? I live in CT and I do not know the law.
I've been trying to find solutions, but because it is an investment home I do not qualify for anything. How does this affect my credit?
Any help will be greatly appreciated.
Thanks.
Regardless as to whether you transfer the property to an LLC, the loan is still in your name. Therefore, if you foreclose it will still harm your personal credit.
Hi purplecorazon,
If you let the investment property go into foreclosure, it will definitely affect your credit. By forming an LLC at this point in time, you can transfer the property, but you cannot transfer the liability for the loan. However, your primary residence cannot be foreclosed by the lender. They may place a lien on it, though.
If you let the investment property go into foreclosure, it will definitely affect your credit. By forming an LLC at this point in time, you can transfer the property, but you cannot transfer the liability for the loan. However, your primary residence cannot be foreclosed by the lender. They may place a lien on it, though.
Thanks guys. You are a great help. Do I have any options?? so far I am current with payments. Every alternative I try to find does not work for me. It seems that all the doors are closed because it is an investement property. I cannot take this anymore. I am trying to be responsible, but my tenants on the other hand don't care. Is there anything I can do??
I cannot make the payments anymore..... :cry:
I cannot make the payments anymore..... :cry:
you mentioned that you attempted to sell, but how long did you give it before you gave that up? it would seem a short sale is your best bet, as you attempted earlier. there are certainly borrowers out there who would be interested in purchasing.
Guest
Sorry about yoru situation
If you have already listed yoru property on the MLS then you are doign the right thing.
Just try to get a short sale specialist and that person will approach the bank for a short sale, based on the fact that the property is already listed, but nto sold.
Good luck and feel free to ask
Sorry about yoru situation
If you have already listed yoru property on the MLS then you are doign the right thing.
Just try to get a short sale specialist and that person will approach the bank for a short sale, based on the fact that the property is already listed, but nto sold.
Good luck and feel free to ask
Thank you very much for all your help. You guys are a great guide.
Well, the property has been listed since May 23rd. for 210,000, two people saw it, but they did not like the location. Then, the person I am working with said it is too high, so we lowered it to 190,000 about two weeks ago and nothing. No even one person interested.
I owe the bank 275,000. Is it possible that the bank can go after my primary residence to put a lien on it and also I would have to pay to the IRS for the difference or is one thing or the other? Meaning that if the bank foregives me the balance, then they will issue a 1099C for the difference, therefore I would have to pay the IRS taxes on it. However, if the bank puts a lien in my primary residence, then I would not have to pay taxes because I still owe.
Also how does a lien work? would it be just for the difference between the 275,000 and the selling price? or does interest also accumulates?
Well, the property has been listed since May 23rd. for 210,000, two people saw it, but they did not like the location. Then, the person I am working with said it is too high, so we lowered it to 190,000 about two weeks ago and nothing. No even one person interested.
I owe the bank 275,000. Is it possible that the bank can go after my primary residence to put a lien on it and also I would have to pay to the IRS for the difference or is one thing or the other? Meaning that if the bank foregives me the balance, then they will issue a 1099C for the difference, therefore I would have to pay the IRS taxes on it. However, if the bank puts a lien in my primary residence, then I would not have to pay taxes because I still owe.
Also how does a lien work? would it be just for the difference between the 275,000 and the selling price? or does interest also accumulates?
purplecorazon
Wjen the bak issues you 1099C, you are normally suppose to pay taxes on the forgievn amount.
But end of 2007 a law was passed, which does nto reguire you to pay taxes on the forgiven amount s lognas the house was your primary residence
Good luck
Wjen the bak issues you 1099C, you are normally suppose to pay taxes on the forgievn amount.
But end of 2007 a law was passed, which does nto reguire you to pay taxes on the forgiven amount s lognas the house was your primary residence
Good luck