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Old 02-08-2011, 09:22 PM   #1
ConCooksNinna
 
Join Date: Jan 2011
Default How bad does foreclosure affect you, and for how long

I have a condo in Chicago, I live in Anchorage. The condo in Chicago does nothing but cost me money.... about 2K a month.

I've had the condo for sale for 8 months. Not one offer.

I can not drop the price, because then I would be taking a significant loss, and I don't have the cash to pay for that loss all at once. I can cover the 2K a month no problem at all, but to come up with 15K all at once... that's a different story.

My credit is well... pretty much maxed, and I don't have any collateral which I can use to secure a loan for the loss either.

I can't rent the condo, because the association will not allow it, already 25% of the building is rented. If I were to put up a motion to amend the condo declaration so that I COULD rent it, there would not be sufficient votes for it to pass.

My grandfather suggested I just give the thing back to the bank.... how bad will this screw me over, and for how long?

The mortgage is my name only, so my wife's credit would not be affected... (or would it?) but getting another mortgage will be difficult with out using my income (and therefore credit history) to qualify.

I guess the other option would be somehow strong-arm the association in to letting me rent it, but I don't know where I would begin such an endeavor.
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Old 02-08-2011, 09:22 PM   #2
Layeliess
 
Join Date: Jan 2011
Location: USA
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If you can avoid the place, avoid foreclosure. It's bad.

You're not doing the bank any favors by "giving" it back to them. Then they just have an unsellable condo on their hands and not the nice predictable revenue stream that you promised them.

If you can cover it, great. Give it another year or so and ride this downturn
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Old 02-08-2011, 09:22 PM   #3
teseexeby
 
Join Date: Jan 2011
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I'm curious, what will the association do if you rent the condo? Tell the association if they won't let you rent it then you will sell time shares on it.

Letting the condo go back to the bank will not stop you from paying for it, it will only destroy your credit. The bank will take the condo and sell it for what they can get then you will owe the difference. This is no different than you selling it and working out a payment plan with the bank for the difference. Except the former ruins your credit and the latter doesn't. Be honest and tell them what you have to do and that you need to work out a payment plan for the difference.

I was in this situation once and I ended up moving back to live in the house. It cost me my job but sometimes you gotta do what you gotta do.
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Old 02-08-2011, 09:23 PM   #4
Phero
 
Join Date: Mar 2008
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I'd rather completely ruin my credit than leave Anchorage and move back to Chicago. I love it here, and intend to spend the next many years here, and start my family here.

Calling the Mortgage company is not something I had considered until now... I just figured they would tell me to get bent.

I had forgotten that I would owe the difference between the sale price and my mortgage value.

The association has the power (outlined in the association document) to block physical access to any tenant who does not have a valid lease approved by the association... and by not allow rent I mean to say "occupancy by any other than the owner and immediate family"

I will never buy a condo again.
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Old 02-08-2011, 09:23 PM   #5
cumtoully
 
Join Date: Jan 2011
Location: USA
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You likely want a short sale (where you and your bank agree to sell the condo for the market value and call it even) in this situation. Negotiate it with the bank.

Be warned that if the bank forgives a portion of the loan, that portion becomes taxable as income.
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Old 02-08-2011, 09:23 PM   #6
KateGokskisdibe
 
Join Date: Jan 2011
Location: Canada
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I had no idea you could work a deal like that with a bank... how badly does that affect your credit? I will definitely be calling them tomorrow.

I would be willing to sublet illegally, however the building is only 8 units big... it would not stay secret long, and when they read the doc and realize they can physically block access to the unit they will do so.

I'd rent it for half market value (about $950) to someone I trusted, with no paperwork, but all my friends are comfortable where they are now, and have no intentions of moving.
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