Re: Considering foreclosure on my property


Posted by OC Andy on September 21, 2007 at 16:47:07:


In Reply to: Re: Considering foreclosure on my property
Posted by Carla on September 21, 2007 at 12:46:24:

Carla:

A while back, neg-am loans were considered the best thing since sliced bread, now they have turned out to be the bane of the lending industry.

I suppose all the loan officers who sold these loans to homebuyers without fully disclosing the terms and potential downside of these loans will have to go back to being used car salesmen again.

It sounds like you are paying just the minimum payment on your neg-am loan each month which means that you are adding to the principal balance each and every month you choose to do this.

I would recommend that if you have the monthly income to make the fully amortized payment that you do it. Having the loan balance increase every month will almost guarantee that at some point you will be in real trouble.

If you don't have the income to do this, then I'd suggest listing your home for sale with a quality realtor. Vegas has already seen its heyday and now foreclosures are up dramatically like they are almost everywhere else. Depending on the location of your home and what condition it is in will determine how long it stays on the market as well as how close to your listed price you can expect to get an acceptable offer.

If your home does not sell in a reasonable amount of time, you may need to consider a couple of things:

1. Call your lender and explain your situation and ask if a forebearance or a loan modification plan are available to you as options for your situation.

2. If they say no, then have your realtor ask them for a short sale package and sell your home as a short sale. Pricing your home aggressively as a short sale will generate more interest than having it listed at full market value.

Short selling your home is almost always a better option than missing payments and proceeding through the foreclosure process. If you do start missing payments, the investors will definitely find you.

Try to stay away from the Bk option if possible. If these two things do happen(foreclosure and bk) then if you think that you're "screwed" now, you ain't seen nuthin yet. Those two events will destroy your credit for years to come.

Since you are upside down on the home now as it is, filing bk will not benefit you unless you have other significant assets to payoff your outstanding debt. While I'm not a bk attorney, it appears that filing either a Ch 7 or 13 will only impact your credit report and cost you more $$ without providing any real benefit.

Even though the NV foreclosure timeframe is fairly short, you should have enough options here to avoid a financial and credit disaster.

The IRS has said that the "foregiveness of debt" realized by doing a short sale is exempt from taxation in a few cases, one of which is insolvency. Being upside down on your mortgage and without any other significant assets may just qualify you for this exemption - check with your CPA or tax advisor.

Hope this helps

Andy



Andrew Fitzpatrick
Broker
AMT Realty Advisors
(949) 228-1507
www.amt-realty.com


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