Re: Pros vs cons Of Forclosing

Posted by OC Andy on September 13, 2007 at 02:21:08: In Reply to: Pros vs cons Of Forclosing posted by Adamshome on September 11, 2007 at 15:37:45: Adamshome:

First let me say that I am not an attorney and this information must not be considered legal advise.

A couple of options for you to consider are these

1. List your home with a quality RE agent and have the agent get approval from your first position lender to do a short sale. Doing a short sale on the home could potentially be more favorable to you credit and tax-wise than going through foreclosure.

A foreclosure reported to the credit bureaus will stay on his credit report for 10 years and will seriously impact your ability to rent, get additional credit, etc. for a long time. A "foregiveness of Debt" is reported by your lender as a result of the short sale and you will be issued a 1099 for the difference between what you owe and whatever the settled amount from the loan is(example: if you sell the house as a short sale for $275k, then you will be issued a 1099 for $65k ($340k - $275k) which will be considered income to you in the year that you sell the home.


If you folks used your husbands credit to qualify for the home when you bought it, then you will want to do your best to make sure that his credit standing and score are as good as possible.

2. Reconsider renting your home. If the home just needs cosmetic fixing up (some paint and maintenance) then you can bring it up to a rentable level and reduce your monthly housing payment by the amount of the rental income. Then rent something affordable for a while until you you have enough saved to make a decent downpayment on another home, then sell your current home. this way you still get to stay in your area and you don't have a foreclosure on your credit.


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