Posted on: 25th May, 2011 11:10 am
What would you do? My husband and I purchased our home at the peak of prices. Our community suffered greatly and we are in way over our head. Over $40,000 already... well the house is now rotting due to standing water, and is full of mold. Not to mention, it stinks literally. The work to get the home ready for re-sale would be greater than $10000- For minimal work. We don't have this money. We are already in debt. As we see it, we walk away and foreclose. We have contacted bank, homeowners insurance no help available. What would you do? We can not currently live in the house due to health problems.
Why is there standing water in the home?
We aren't entirely sure sump pump not keeping up with high volume, combined with high water tables.... Is what most contractors have guessed... but they aren't ruling out a sewage/water break... but its been going on for awhile... we just hadn't done routine under-home checks for some time... so we honestly don't know how long its been going. The water level was 12inches, and had been for quite some time.
What you need to figure, is your exposure if you let the home go to foreclosure. If you have a "deed of trust" then the only recourse for the lender is the property it self, as long as the note includes the "power of sale clause" If you have a "mortgage" and you live in a judicial foreclosure state, or your state allows for deficiency judgments, then the lender can come after you for the difference between what the house sold for and what you owe. For example, in FL, the lender can issue the deficiency and collect for up to 20 years. Also, when your home is sold for less than the balance, the IRS reports this as income earned, not lost. You could have a tax implication. Please consult a tax adviser and a attorney to figure your exposure and your rights regarding the water damage. Good Luck!