Posted on: 15th Sep, 2009 01:20 pm
Currently I have a 80/20 interest only (3 years). I bought in 2005 for $325K it's now worth $180K. We have already went through "modification" where the Mortgage company just added three more years to the loan plus another $6K to the principle.
We are not in financial trouble, we make our payments on time. We are having another child and either need to rid of this property or rent it out. When the loan resets again, we won't be able to rent due to payments being too high.
Is it likely that lender will remove the 2nd loan, if we threaten to walk away, (which we will). Now if we do walk away, what are the options? Not concerned about my credit at the current time (even though it's excellent), We just need to get a bigger place (renting or military housing).
We are not in financial trouble, we make our payments on time. We are having another child and either need to rid of this property or rent it out. When the loan resets again, we won't be able to rent due to payments being too high.
Is it likely that lender will remove the 2nd loan, if we threaten to walk away, (which we will). Now if we do walk away, what are the options? Not concerned about my credit at the current time (even though it's excellent), We just need to get a bigger place (renting or military housing).
hi vincent!
welcome to forums!
you cannot force the lender to forgive the second loan just by threatening him. it will be the lender's discretion whether or not he would forgive the second mortgage. if you walkaway from the property, the first lender would foreclose the property and will sue you for the deficient amount. moreover, the second lender will also claim the dues from you. you may try out the option of deed in lieu of foreclosure. this will help you in selling off the property and you won't be liable for the deficient amount resulting from the first loan. as far as second loan is concerned, you will have to pay it off. but after a deed in lieu, you will have to wait for 2-3 years in order to get another loan.
feel free to ask if you've further queries.
sussane
welcome to forums!
you cannot force the lender to forgive the second loan just by threatening him. it will be the lender's discretion whether or not he would forgive the second mortgage. if you walkaway from the property, the first lender would foreclose the property and will sue you for the deficient amount. moreover, the second lender will also claim the dues from you. you may try out the option of deed in lieu of foreclosure. this will help you in selling off the property and you won't be liable for the deficient amount resulting from the first loan. as far as second loan is concerned, you will have to pay it off. but after a deed in lieu, you will have to wait for 2-3 years in order to get another loan.
feel free to ask if you've further queries.
sussane