If you’re going to get rid of these houses, either by shortsale or foreclosure, then do not make any more payments on them or pay anything else. I think you said that they weren’t currently rented, so I’m guessing you’re not collecting any rent on them. If you are collecting rent & you stop making pmts., you could possibly run into a problem with equity skimming (which is when you keep the rent but don’t make the payments). Read the Assignment of Leases that you probably signed when you bought the houses to see if this problem is addressed there.
If the bank will agree to do a shortsale with you, then call other investors in your area to see if you can sell them. Call the we buy houses signs, call the classified ads of other owners who have for rent ads in paper & see if they’re int’d in buying yours. Do whatever you have to do to get them sold - that is if you do a shortsale. If you just let them foreclose then basically you just walk away now & don’t do anything.
Depending on which way you go with all this, you may want to run it by an attny. first.
Thank you to you, and everyone else, who continue to listen to my whining. Thank you for telling me exactly what to expect. I know I’ve been throwing thousands and thousands away for too long. I’m not too concerned about my credit going bad; I can live with that much better than I can live with this.
Some of the biggest concerns I have are:
Do I have to keep them insured while letting them go? (Can I rent them month to month just to keep them insured–and put the money aside to give to the banks?)
That’s fine, Vic. I don’t expect everybody to agree with me on every issue, but I speak from what I have experienced in doing short sales.
It won’t hurt to ask the bank beforehand, but, as I said before, it’s non-essential; whether you just want give them a heads up or try to gauge their interest. In today’s market, when short sales’ share of the market gets bigger and bigger, and Florida is a good example, banks always agree to review the offer (at least I’ve never heard otherwise), but they do it in a non-committal way. And usually you won’t get to talk to the person who makes a decision, so you won’t get much of a response in regards to how they will proceed. Most of the time the answer is “Yes. Do you have an offer?”
As to collecting all the documentation: it’s a good idea to inquire what papers they want to see, and sometimes they have their own paperwork for this, but I never submitted anything without an offer. Firstly, and very likely, they won’t even take it. There is not much sense for them to review the documents if the offer may never come. And secondly, even if one submits the paperwork in advance, by the time the offer comes in they will ask for updated documents, like paystubs, bank statements, financial info and whatnot. So sending all of this in advance serves little purpose.
If you do not have ins. on the property the bank will probably force-place it, which means they take out an ins. policy (that usually covers just them) & they add the cost of that ins. onto the amt. that you owe. If you know you’re going to file bankruptcy (if they get a judgement), then who cares what they add on. They can add a million dollars & it wouldn’t matter to you.
I would not rent it just to pay ins. Why deal with all that stress & aggravation just to pay ins. on a house that you’re walking away from.
Let me simplify this for you as much as possible. Based on what you’re saying that you’re going to eventually file bankruptcy if they get a judgement against you, then you shouldn’t do anything at this point. Like I said you best bet here is a short sale. If you don’t even want to do that, then don’t do anything. Don’t make any pmts. Don’t worry about ins. Don’t do any repairs. Don’t rent it out. Don’t do nothing (ok Don’t do anything). Just let them foreclose & if they pursue judgement then you file bankruptcy. It’s no more complicated than that.
You’re making this way more complicated than it really is. No need to do that.
You don’t need a lawyer for any of this. However if you choose to talk to one, just do so for to run it by them. It shouldn’t take you no more than an hour of their time. Cost to you around $300 or so. No more than that. You will eventually need a lawyer though to file the bankruptcy if it comes to that.
But as far as where you are now. I would be willing to bet that the lawyer tells you the same things we’re telling you here.
Re: You’re from Jersey? I’m from Jersey! - Posted by LightWalker
Posted by LightWalker on August 04, 2009 at 12:54:36:
Wow… I’ve read your posts and have learned from you. Looking forwarding to learning more. I’m like your biggest fan… (LOL) … =^) … Jersey girl in VA… How cool is that… =)
I’m with you G.O. Overall it probably doesn’t matter much if she does it now or later. All those factors you indicated are very valid.
If it’s a big bank, then yeah it probably wouldn’t matter at all.
If it’s a small local bank then I would think you’d have better luck submitting everything early. At least you could kind of feel them out & have a line of communication open, hopefully with someone that would be in the loop at that bank. If it’s a small local bank, they probably wouldn’t want the house back, so they may be more likely to work with you to get it sold.
Hey Vic: Thanks for all the advice; I feel really good about the future now, and I’m certainly not stressing as much. One more thing: I have a renter waiting for the empty house–should I rent it out or not?
G.o.Smith asked where my houses are–they are in Winter Haven & Haines City, FL.
She also asked “What did I decide to do”?. Well, I did decide to let them go and try for a short sale. However, I just received a call from someone who wants to rent the other property and will be paying $250 less than the mortgage amount. The first house covers the $250, but it is an adjustable rate which will go up in about a year or so. So, I will still be short for payments–and still paying insurance, taxes, repairs, etc. And STILL the value of the homes will never come close to the amount I owe.
So, my next question is: Should I rent the other house now; will I still be able to try to do a Short Sale if it is rented–I’ll go month-to-month?
Music to my ears–thanks to everyone for your invaluable, free, advice.
Hope you are all doing well with your investments, financial matters, etc. All I could say to you is “Thank You So Much”. Just knowing that there are so many great people out there willing to help perfect strangers will make it all easier to get through!
Thanks again–I wish all of you the best–you deserve it!
You gonna have to decide what you want to to do. Do you want to keep the houses for now & see what happens in the future? Or do you want to just get rid of them now?
If you rent them out, & make pmts., the bank probably will not do a short sale.
If you can rent them out & cover the mtg. or at least come close to covering it, why would you want to walk away? Why not stay in the game & see what happens? You can always short sale later if things don’t work out. However if this shortage is going to keep you from being able to buy food, then by all means get rid of them now. Can you afford to make up for the shortage?
One thing to consider too is that these houses are an hour from where you live. Managing them will not be easy. That’s a long drive just to show a house & deal with everything else that’s going to come up. So it’s really up to you what you do. Get rid of them now or stay in the game & see if maybe things start to break your way.
I might be able to get both rented and come close to making the mortgages–interest only. If I want the principle to go down, it will be money out of my pocket–plus insurance, repairs, etc. I can still afford food, buy my other expenses are getting real tight. I am totalling my expenses in and out. As of last night, I figured that I fall short every month by atleast $500–which is always more for repairs, etc. (more like $1500 when I pay for an empty house). This is money that I draw from my savings account which is quickly diminishing. It was my nest egg for retirement–dwindling down to almost nothing.
Biggest worry–I’ll keep paying out of pocket till I’m broke and even if the market picks up, I’ll never, ever be able to sell them for what I owe.
I’ll see what this weekend brings. I’ll try to rent and hang in there for a few more months but truly believe I need to let go. I’ve honored my obligations for about three years now–donating about $60,000 that I’ll never see again.
You’re right–it is painful to drive an hour away every weekend to post signs, meet people, pay repairmen, etc. I’m so tired of being alive but not living.
Thanks for all the information and your valuable time.
Nancy
P.S. You said I’m gonna have to decide what I want to do–I know what I want to do, but I’ve been trying so hard to fight it. I’m tired of fighting. I believe by the end of the year they’ll be out of my life one way or another.
I wonder you are still here, asking actually the same questions.
Here is the same answer: if you rent those properties, short sale is not enforceable. Stop payments and wait foreclosure to happen. This is not the end of the world.
If you want to take a chance in gaining a better outcome for future, do the short sale, but this way takes guts, skills and knowledge, and it does not seem you ready for it. You may review my advice that I gave you earlier on this point. Just remember the earlier you will get yourself out of this sinkhole, the more power you will have left to move on.
You sound like nice, intelligent person, that?s why so many people here sincerely try to help you out. Beside tree years of collecting debt prove nothing but weakness. Get it over girl, and move, just move.
My opinion is that if you’re falling short of paying your regular living expenses every month by $500, then you should either shortsale or let them foreclose. There is no way you should be spending money on these houses if you’re coming up short on living expenses. You probably should have stopped long ago. I would definitely let them go. Either that or get another job just to pay for them.
Renting these houses is probably going to cost you even more money. Gas, ads, repairs, vacancy, etc. are all expenses that you don’t need right now. Not only that, but if you get stuck with a major repair like a roof, you may not be able to afford it.
So I don’t see how you can continue to feed these properties every month. Based on what you’re saying I don’t even see the light at the end of the tunnel for you. Unless there are some other factors, it’s best to try to shortsale them. If bank won’t cooperate, then let them foreclose. I don’t see any other options.
