Posted on: 19th Apr, 2010 12:17 pm
Hello, hoping i can get some good advice here from anyone. :)
I purchased my first home about 4 years ago in Washington State. I did not have enough for a significant down payment, so I did a 80/20 loan to avoid paying PMI.
The original sale price was $238,000. So I had the primary mortgage through IndyMac for $190k and junior mortgage through Citi for $48k. Both loans are 30 year fixed.
I currently owe about $182k on the primary and $45k on the junior. The house value now I would guess is probably around $190k-$200k based on recent sales in the neighborhood.
My work is relocating me to another state, and I have to decide what to do with the house.
Currently my PITI is about $1950 a month. I have done some research and feel that I could rent for about $1200 a month.
So my options are:
1) Rent and eat $750+ a month, at least...this is assuming I have a tenant at all times, which I know isn't realistic.
2) Try to short sale. Not sure how this works with 80/20 (looking for advice on that here)
3) Foreclose. Again, not sure of how this works with the 80/20.
Really I'm wanting to know what happens with the junior mortgage when I short sale and there is not enough to cover both loans. Will Citi sue for the balance due?
I am current on all payments and have a pretty decent credit score that I'm not very enthused about screwing up.
Any help is much appreciated! :)
I purchased my first home about 4 years ago in Washington State. I did not have enough for a significant down payment, so I did a 80/20 loan to avoid paying PMI.
The original sale price was $238,000. So I had the primary mortgage through IndyMac for $190k and junior mortgage through Citi for $48k. Both loans are 30 year fixed.
I currently owe about $182k on the primary and $45k on the junior. The house value now I would guess is probably around $190k-$200k based on recent sales in the neighborhood.
My work is relocating me to another state, and I have to decide what to do with the house.
Currently my PITI is about $1950 a month. I have done some research and feel that I could rent for about $1200 a month.
So my options are:
1) Rent and eat $750+ a month, at least...this is assuming I have a tenant at all times, which I know isn't realistic.
2) Try to short sale. Not sure how this works with 80/20 (looking for advice on that here)
3) Foreclose. Again, not sure of how this works with the 80/20.
Really I'm wanting to know what happens with the junior mortgage when I short sale and there is not enough to cover both loans. Will Citi sue for the balance due?
I am current on all payments and have a pretty decent credit score that I'm not very enthused about screwing up.
Any help is much appreciated! :)
i think i knew you a few years ago...i kept referring to "that one guy" whose name i couldn't quite recall. funny how memory can blot out things.
sorry to hear of your predicament. clearly, it seems rather foolish to have a short fall each month of about $750, though it might (might) be worthwhile to you, depending on your income level, resources, etc. that's truly for you to judge, of course.
as for short sales, citi will be sucking wind because the first mortgagee gets paid first. in light of the failure of indymac, that seems like a raw deal for citi, but that's the way of the financial world these days (years). that wouldn't necessarily stop citi from trying to hold you hostage by seeking a promissory note for the unpaid amount, or reporting your credit in a negative way as a result of what will become a charge-off. they'd still want to collect that debt eventually, even if you didn't sign a promissory note (my guess, anyway).
with a foreclosure, it's still the same deal - citi loses, indymac "wins" and you lose, too. the foreclosure, though, will cost you more dearly credit-wise than a short sale would.
obviously it's all up to you in the end, and we can't really make up your mind for you. it would be beneficial to speak with an attorney or even a counselor (i like the hud-approved counselors best), to get a better line on what this could end up costing you.
sorry to hear of your predicament. clearly, it seems rather foolish to have a short fall each month of about $750, though it might (might) be worthwhile to you, depending on your income level, resources, etc. that's truly for you to judge, of course.
as for short sales, citi will be sucking wind because the first mortgagee gets paid first. in light of the failure of indymac, that seems like a raw deal for citi, but that's the way of the financial world these days (years). that wouldn't necessarily stop citi from trying to hold you hostage by seeking a promissory note for the unpaid amount, or reporting your credit in a negative way as a result of what will become a charge-off. they'd still want to collect that debt eventually, even if you didn't sign a promissory note (my guess, anyway).
with a foreclosure, it's still the same deal - citi loses, indymac "wins" and you lose, too. the foreclosure, though, will cost you more dearly credit-wise than a short sale would.
obviously it's all up to you in the end, and we can't really make up your mind for you. it would be beneficial to speak with an attorney or even a counselor (i like the hud-approved counselors best), to get a better line on what this could end up costing you.