Posted on: 23rd Jun, 2009 11:47 am
hi,
i bought a 2nd home/rental prop along with a friend...who now wants to let go of the house. the house is 130k under and the rental does not cover the monthly mortgage. he is okay to take the over the loan and then walkout but the bank will not take my name out of the loan ...it considers it as refinance...which can't be done due to value to house.
what are my options, will the lender come after my first house or personal accounts if we walk out of the 2nd home.
what is the best way to walkout of the 2nd house.
thanks in advance
i bought a 2nd home/rental prop along with a friend...who now wants to let go of the house. the house is 130k under and the rental does not cover the monthly mortgage. he is okay to take the over the loan and then walkout but the bank will not take my name out of the loan ...it considers it as refinance...which can't be done due to value to house.
what are my options, will the lender come after my first house or personal accounts if we walk out of the 2nd home.
what is the best way to walkout of the 2nd house.
thanks in advance
patkil
Welcoem to the forum
if you walk away from the house, the lender will probably forclose the property and send you a 1099C form at the end of the year, if the firgive the remainign amount
You will be liable to pay taxes on the forgiven amount, since this is a investment property
Good luck and feel free to ask
Welcoem to the forum
if you walk away from the house, the lender will probably forclose the property and send you a 1099C form at the end of the year, if the firgive the remainign amount
You will be liable to pay taxes on the forgiven amount, since this is a investment property
Good luck and feel free to ask
Thanks for that...so if the Loan amt is 240k and market value is 150k. What will the forgiven amount be.
Guest
That would depned on for how much the bank will be able to sell the house for.
Good luck
That would depned on for how much the bank will be able to sell the house for.
Good luck
Hi Guest,
If you owe 240k on the mortgage and the house is sold for only 150k, the balance amount of $(240k-150k) or $90k could be forgiven by the lender.
I think you should talk with the lender and check out the possibility of a deed in lieu of foreclosure or a short sale. In a short sale, your credit will be affected by 70-100 points and you will have to pay off the deficiency. On the other hand, a deed in lieu will drop your credit by more than 100 points, but you can expect your lender to forgive the difference.
If you owe 240k on the mortgage and the house is sold for only 150k, the balance amount of $(240k-150k) or $90k could be forgiven by the lender.
I think you should talk with the lender and check out the possibility of a deed in lieu of foreclosure or a short sale. In a short sale, your credit will be affected by 70-100 points and you will have to pay off the deficiency. On the other hand, a deed in lieu will drop your credit by more than 100 points, but you can expect your lender to forgive the difference.