I'm trying to determine if the bank can claim unpaid debt on a foreclosure and the best advice on my unique situation. I attempted to sell my primary residence in 2008 after a relo. The house didn't sell andafter 8 months on the market I decided to rent it. It's been rental up until 2015 when I my job decided to move be back to the area. However, the house is now worn to the point wear major maintenance is required. More importantly, the house still isn't worth the purchase price. Its up side down. My faniancial situation is good. Does that prohibit me from foreclosing without the bank seeking unpaid debt? What about a short sell? I'm ok with renting while my credit is being repaired. I just want to get from under this money trap. It's been years of dumping money into this place in hope for a market turn around. If short sell is the best option do I need to be llate on payments for this to be put in motion? Do I continue to make payments when short selling? Do I pay the real estate fee when short selling? Does deed in lieu fair better than other options?
you would have to stop paying to start a short sale process. ALSO YOU have to prove hardship, if your finances are good you will not qualify for a deed in lieu of or short sale. The fact that you converted to a rental property can even weaken your position even more. You can be sued for the short fall in a foreclosure
Also...just because it is not worth what you paid for it, doesnt mean you are underwater. Youve been paying down the mortgage for 7 years. You should have reduced your mortgage balance by 10% in that time, plus whatever your down payment is.
If we had the numbers on what is owed and the current value, we may be able to advise better. Just earlier this year I had a client call me to short sale their house. The house was worth $50k less than what they paid on it...so they assumed they were under water. When all was said and done, we listed the property as a standard sale and they walked away with a check for $10k.
Thanks for your responses. I have a lot to think about.