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To foreclose or to not foreclose, that is the question

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Penny_Lane
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To foreclose or to not foreclose, that is the question  Reply with quote  

I own, with my husband, a condo that we purchased in 2007. Yes. 2007.
So, it is now underwater.
We bought it (it was the cheapest listing in our town at the time) with the intention of improving it, selling and making a little money and moving up.
Facts -
It's been improved - all but 1 bathroom (would cost approx. $4000.00 to repair - materials and labor). The bathroom is unusable. It's a 2 bath.
Our condo association is beginning a balcony renovation project this coming summer - each owner will be responsible for $6000.00.
My condo is worth approx. $120K and the mortgage is for $154K.

I recently got the mortgage modified from a 6,75 percent to 4 percent.
My husband lost his job last fall.
I am beginning to believe it may be smart, and this is why I'm posting this, to walk away, let it foreclose and move on, rather than investing any more hard earned money into this situation.

Opinions?
Post Sat Mar 23, 2013 5:11 am
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coaster
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Have you looked into the government programs?

http://www.bankrate.com/finance/refinance/refinance-options-when-you-re-underwater-1.aspx

Have you discussed a short sale with your mortgage holder?

http://homebuying.about.com/od/4closureshortsales/a/shortsalebasics.htm
http://www.bankrate.com/finance/real-estate/5-common-buyer-mistakes-in-a-short-sale-1.aspx

How about a deed-in-lieu?

http://www.knowyouroptions.com/avoid-foreclosure/options-to-leave-your-home/mortgage-release

A foreclosure is going to hurt your credit really bad. Confused

~Tim~
Post Sat Mar 23, 2013 5:47 pm
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Penny_Lane
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Thanks so much for the links.
I'm not sure I understand the deed-in-lieu.

I did recently modify our loan.
Perhaps a short sale would be something to check out.
Post Sun Mar 24, 2013 10:55 pm
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coaster
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A deed-in-lieu is kind like a consensual foreclosure without the nasty bad credit repercussions. The link I posted explains it pretty well.

~Tim~
Post Mon Mar 25, 2013 12:16 am
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gilbertholdings
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if you do a foreclosure, i'd also look at a short sale, should be less of a hit to your credit. in either case, remember you'll probably have to pay taxes on the difference between what you or the bank sells it for and the mortgage. make sure you keep some money for that so you don't get into irs debt because that's never going away and will increase pretty quickly.
Post Fri Mar 29, 2013 10:36 am
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