Posted on: 22nd Mar, 2009 10:13 am
I live in Northern VA and bought a home about 5 years ago. I no longer live in the home, but the co-owner does. Neither one of us are interested in keeping the property and are finding the mortgage payments to be a struggle to keep up with. We want to sell the property, but can't because of the real estate crash. We owe about $195K and it just appraised for $131K. We aren't really trying to make a profit, just break even and get rid of it.
Any idea of when things will pick up and it will be realistic to be able to break even on the home??? We are only going to be able to continue to make the payments for another year, two at the very most. If we knew that in a year or two we could sell it and break even, we could stick it out. But if in a year or so, there is no hope for selling it and we can't make the payments anymore, we will have to foreclose.
If that's the case would it be better to foreclose now and not sink the tens of thousands of dollars in mortgage payments into it that we would over the next two years??
Any idea of when things will pick up and it will be realistic to be able to break even on the home??? We are only going to be able to continue to make the payments for another year, two at the very most. If we knew that in a year or two we could sell it and break even, we could stick it out. But if in a year or so, there is no hope for selling it and we can't make the payments anymore, we will have to foreclose.
If that's the case would it be better to foreclose now and not sink the tens of thousands of dollars in mortgage payments into it that we would over the next two years??
Hi Stressed,
It is very difficult to state when the real estate will turn arouond. The current market trend does not provide any clue as to how long it will behave the way it has been doing. It may take 2 years or more to get the real estate industry back on track. I think it would be realistic for you to let go of this property, if you are ready to take a hit on your credit score.
However, instead of a foreclosure, I would suggest a short sale, provided you can afford to pay the deficient amount. This will drop your credit score by almost 75-100 points. You can also do a deed-in-lieu where the deficient amount would be forgiven, but it will affect your credit almost as much as a foreclosure will do. I think you should discuss the matter with your lender.
Thanks,
Jerry
It is very difficult to state when the real estate will turn arouond. The current market trend does not provide any clue as to how long it will behave the way it has been doing. It may take 2 years or more to get the real estate industry back on track. I think it would be realistic for you to let go of this property, if you are ready to take a hit on your credit score.
However, instead of a foreclosure, I would suggest a short sale, provided you can afford to pay the deficient amount. This will drop your credit score by almost 75-100 points. You can also do a deed-in-lieu where the deficient amount would be forgiven, but it will affect your credit almost as much as a foreclosure will do. I think you should discuss the matter with your lender.
Thanks,
Jerry
let me check my crystal ball.
oh darn...not only am i not getting any answers from that crystal ball...it doesn't even exist!
so few would have predicted the current real estate situation that you won't find anyone with a good sense of what's going to take place a year or two down the road.
i guess you've gotta do what you've gotta do.
oh darn...not only am i not getting any answers from that crystal ball...it doesn't even exist!
so few would have predicted the current real estate situation that you won't find anyone with a good sense of what's going to take place a year or two down the road.
i guess you've gotta do what you've gotta do.
I am getting mixed info. on how short sales, deeds-in-lieu, and foreclosures affect your credit respectively. Which has the worst/least impact?
Also, how common are deficiency judgements in VA? I know I lender can go after the judgement, but do they bother or usually just write it off? Does PMI help me in that case? Are you able to make payment arragements for the difference?
Also, how common are deficiency judgements in VA? I know I lender can go after the judgement, but do they bother or usually just write it off? Does PMI help me in that case? Are you able to make payment arragements for the difference?
Hi Stressed,
As I have already mentioned that a short sale would be least damaging in this situation as it will drop your credit score by approximately 75-100 points. But you will be required to pay the deficient amount.
In a deed-in-lieu, on the other hand, the deficient amount would be forgiven by the lender. But this will cost you almost 250 points on your credit score. A full-fledged foreclosure can be more damaging than that.
As far as I know, deficiency judgment can be filed in VA. It depends on the lender whether they would write it off or obtain a deficiency judgment against you.
Thanks,
Jerry
As I have already mentioned that a short sale would be least damaging in this situation as it will drop your credit score by approximately 75-100 points. But you will be required to pay the deficient amount.
In a deed-in-lieu, on the other hand, the deficient amount would be forgiven by the lender. But this will cost you almost 250 points on your credit score. A full-fledged foreclosure can be more damaging than that.
As far as I know, deficiency judgment can be filed in VA. It depends on the lender whether they would write it off or obtain a deficiency judgment against you.
Thanks,
Jerry