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What shall I do with this property?

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RandRmoney
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What shall I do with this property?  Reply with quote  

I am the administrator of my deceased father's estate. His home in N.C. is worth about 75k but the balance of his mortgage is like 120k. Are there any programs out there to correct this situation?
Post Mon Dec 19, 2011 2:17 am
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oldguy
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Normally the estate sells the house for the $75,000 and pays off the $120k loan with the $75k plus other funds in the estate. If the estate doesn't have $45k of additional assets, that part of the loan is forgiven. Ie, you, as a relative, will not be held responsible for the debt of a deceased.
Post Mon Dec 19, 2011 5:40 pm
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RandRmoney
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But as the administrator of the estate I have the option of keeping and maintaining the house, correct? I am exploring options of renting out the house until the market picks up.

Also, aren't there programs out there that help people in upside down mortgages?
Post Mon Dec 19, 2011 6:26 pm
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oldguy
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Yes, you can keep it and rent it. That's probably what I would do (I'm a landlord), I would keep it, rent it out, and sell it in a decade or so. That way your renters will be paying the loan for you - and the house most likely will go up in value, maybe by 50% or so.
As for prorams that help upsidedown loans - the new (2 week old) program lets you refinance the loan at a lower interest rate, but it doesn't lower the loan amount. And the programs are for personal residences only, not for investment properties. So you'll probably need to keep the loan that you have.
Post Mon Dec 19, 2011 7:52 pm
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littleroc02us
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Old Guy, doesn't he have to pay off the 75k before he can take the house from the estate???

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon Dec 19, 2011 10:26 pm
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coaster
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Depends on the loan terms. I don't think mortgages are assumable any more, but at one time it was possible. Of course, that's not an attractive option in this case anyway.

RandRmoney, I bet you're thinking of the Recovery Act's "Making Homes Affordable" program. I'm pretty sure that has expired. But here's the website if you want to check it out.

http://www.makinghomeaffordable.gov/Pages/default.aspx

~Tim~
Post Tue Dec 20, 2011 5:57 am
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littleroc02us
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I just thought with estates that when someone dies, what he owns must stand for what he owes before anyone gets anything.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Tue Dec 20, 2011 4:38 pm
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coaster
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Well, he said he was the administrator, not the owner. I take it that means the estate isn't settled yet. RandR???....

~Tim~
Post Wed Dec 21, 2011 7:58 am
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Bibika
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Do you consider remortgaging or is this an option at all, since i did quite get if you are an administrator or an owner. Maybe remortgaging can allow you to rent the property and lower the mortgage cover expenses. Maybe that way you can start paying off the mortgage with the monthly rent and even make some money.
Just a thought..
Post Thu Dec 22, 2011 11:19 am
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eastmn
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In today's market the bank might just take 75K payoff, and call it even.
It may be worth a try.

...
Post Thu Dec 22, 2011 7:25 pm
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Offshore-Wealth.com
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Interesting,

Sadly, in this situation, there is a huge problem of $45K which will come out of the estate value, so you have a big decision to make. If you just let the bank take the home, it becomes and uncollectible balance, and by the time the bank comes after the deceased, the estate is settled and rarely will a bank come after balance owed after property is sold at auction.

I had a similar situation, and given most homes are upside down, I offered to purchase mortage from bank for less than owed, they refused to deal, so given the owner had no assets of value, there was nothing to come after, so it was decided to let bank foreclose since they were unwilling to negotiate a settlement. Their loss.

In this case, renting was not going to produce any positive cashflow in the long term, so your situation may be different, the point is, research all your options first, but unless there is a personal attachment to home, let it go and save the $45K loss.

Good luck,

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Post Thu Dec 22, 2011 9:39 pm
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123akshay
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the best option would be renting it out...as it will fetch you money always....
Post Thu Jan 12, 2012 11:39 am
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tonybringa50
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i don't know about your properity
Post Thu Jan 26, 2012 2:36 pm
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dean40moore
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good tip for properity
Post Fri Feb 24, 2012 5:03 pm
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fast
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Re: Thanks  Reply with quote  

quote:
Originally posted by RandRmoney
But as the administrator of the estate I have the option of keeping and maintaining the house, correct? I am exploring options of renting out the house until the market picks up.

Also, aren't there programs out there that help people in upside down mortgages?


This sounds like a nightmare in the making. What experience do you have as a landlord? Becoming a landlord because you want to become one is fine, but becoming one because it fell in your lap may not be a great idea.

Would you take out a loan for $120K for a piece of property that was worth $75K because you thought it might go up in value (oh say 50%!; that's $37.5K). It would be worth (what?) $112.5K!

What am I missing?
Post Sat Feb 25, 2012 1:32 am
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