Posted on: 18th Apr, 2009 12:50 pm
Hello, I'm so glad to have found this forum so I can get some expert advise. I'm so stressed and losing sleep as to what I can do. I live here in CA and also have the rental property in CA. Rental property is valued at $289K (from Zillow.com) and my loan is $496K. I have 2 loans: first is with Wells Fargo as an interest only payment with the ARM expiring on May 2010. My second loan is with BofA with a fixed rate. I'm still current with all my payments and have a renter until Sept. Rent doesn't cover the mortgage payment and around $1500 out of my pocket every month. If I lose the renter, will definitely not able to afford mortgage payments.
Can I do a shortsale on this rental property? Will the bank go after my primary home, retirement and savings if I do a shortsale? Or should I hang on? Until when? Is selling and then paying the bank the difference overtime an option?
What would be your recommendation as to what to do with this rental property knowing that it will take long for the value to go back up.
Please advise because I'm so stressed and been losing sleep a lot.
Can I do a shortsale on this rental property? Will the bank go after my primary home, retirement and savings if I do a shortsale? Or should I hang on? Until when? Is selling and then paying the bank the difference overtime an option?
What would be your recommendation as to what to do with this rental property knowing that it will take long for the value to go back up.
Please advise because I'm so stressed and been losing sleep a lot.
Wow you have an interest only loan and still have $1500 mo out of pocket?
I would check to see whether you can raise your rent when the current lease expires. Many self employed borrowers no longer qualify in CA. As a result, many of them will look to rent. It may drive up the rentals in your area. Look into it before you make any decisions.
I would check to see whether you can raise your rent when the current lease expires. Many self employed borrowers no longer qualify in CA. As a result, many of them will look to rent. It may drive up the rentals in your area. Look into it before you make any decisions.
I'm also under water in Califronia. I have a total 240k in 2 fixed rate loan at 6%. The payments including insurance and taxes are a little of $1800. The current tendants pay $1,300, so I lose about $500 every month. I just recieved notice from the property manager that tendants have put notice in. Rent in my area has changed and is going down. Forecast of the new rent will be between $1,100-$1,200 a month. I bought the home 5 years ago for $240k and is now worth about $130k. I also have $350k loan on my primary home 6.25% fixed. I'm underwater on my primary home by $100k also, but can still manage payments and plan on keeping it. I feel like I need to cut my loses on the rental property what are the repercussions from a short sell or walking away. Can they do anything to my primary home?
robelleb and Danny R
Welcoem to forum.
I think 40-50% of the home owners in CA are in the same situation. Under water.
To answer your question. If any of your shortsell, then the bank need to agree for the short sale price. Once they agree you need to make sure you have the right terms in your documentation to make sure that the bansk do nto come after the difference later. You woudl need to realtor who is a short sale specialist and knows the details of short sale to get you out of this.
If any of you are goign to walk away, probably the bank will forclose the property and there is a possiblity that yoru seocnd loan will be sent for collection and they can sue you for the rest fo the money.
But in both the cases you will have an impcat on your credit score. With short sale, it is probably 150 poitns and with forclosure 250 poitns and both will stay on yoru report for 7 years.
Good luck and feel free to ask
Realgeni
-Good credit is easy to achieve, as long as you use it responsibly.
Welcoem to forum.
I think 40-50% of the home owners in CA are in the same situation. Under water.
To answer your question. If any of your shortsell, then the bank need to agree for the short sale price. Once they agree you need to make sure you have the right terms in your documentation to make sure that the bansk do nto come after the difference later. You woudl need to realtor who is a short sale specialist and knows the details of short sale to get you out of this.
If any of you are goign to walk away, probably the bank will forclose the property and there is a possiblity that yoru seocnd loan will be sent for collection and they can sue you for the rest fo the money.
But in both the cases you will have an impcat on your credit score. With short sale, it is probably 150 poitns and with forclosure 250 poitns and both will stay on yoru report for 7 years.
Good luck and feel free to ask
Realgeni
-Good credit is easy to achieve, as long as you use it responsibly.
Do your best to hang in there. See if either lender would modify your loans by lowering your interest rate. That would reduce your monthly losses. The last thing you want to do is walk away from the rental property.
you can absoutley call your ledner and see if they can help you, but you need some patience and keep tryig.
Good luck and feel free to ask
Good luck and feel free to ask