Posted on: 10th Oct, 2010 04:26 pm
my husband lost his job a year ago and we have worked hard the past 12 months to stay current on our loan. we have a 80/20 and so far our primary mortgage company has not allowed us to refinance the loan in any way. we're running out of cash and plan to relocate to the florida area in the next 1-6 months.
i am wondering if it is better for us to stop making mortgage payments and allow the bank to begin forclosure. or should we try to continue to stay current on our mortgage though that's going to be a real stretch right now and work on trying to get a short sale. what are the benefits and drawbacks of each senario with a 80/20 loan?
i am wondering if it is better for us to stop making mortgage payments and allow the bank to begin forclosure. or should we try to continue to stay current on our mortgage though that's going to be a real stretch right now and work on trying to get a short sale. what are the benefits and drawbacks of each senario with a 80/20 loan?
Hi kanecara,
As you want to relocate to Florida and want to get rid of the present property, it'll be better if you could contact your lender and apply for a deed in lieu of foreclosure. You should inform the lender about your financial hardship and request him to accept your request. Though you've 2 loans, they are purchase mortgages. Thus, you won't have to pay the deficient balance to the lender.
Thanks
As you want to relocate to Florida and want to get rid of the present property, it'll be better if you could contact your lender and apply for a deed in lieu of foreclosure. You should inform the lender about your financial hardship and request him to accept your request. Though you've 2 loans, they are purchase mortgages. Thus, you won't have to pay the deficient balance to the lender.
Thanks
What are the repercussions of doing a deed in lieu vs. the other two options? Also, I thought I would be responsible for the deficient balance to my second lender at least. Can you explain how them being purchase mortgages will allow me out of the deficient balance?
Thanks for your help.
Thanks for your help.
hi cara!
welcome to forums!
if you've 80/20 purchase mortgage, then the second mortgage will also be forgiven by the lender when he accepts your request for a deed in lieu of foreclosure. in case of a short sale or a normal foreclosure, you'll be liable for paying the balance amount resulting from the property sale.
feel free to ask if you've further queries.
sussane
welcome to forums!
if you've 80/20 purchase mortgage, then the second mortgage will also be forgiven by the lender when he accepts your request for a deed in lieu of foreclosure. in case of a short sale or a normal foreclosure, you'll be liable for paying the balance amount resulting from the property sale.
feel free to ask if you've further queries.
sussane
Have you talked with the bank about a short sale? If they're willing to approve one, try to stay current in order to save your credit as much as possible. But it's a real dilemma since you're running low on cash. I'd recommend you talk with an attorney to discuss your options. Wish you all the best!