Your best option is to Buy 'n Bail! It's today's Fix and Flip!
Remember, don't throw yourself under the bus!!!
I believe that we could help you with this situation, there are several options that could be discussed. When you have a chance, you can email me at
Sofia@WeLowerYourRate.com with a convenient time to contact you. Look forward to speaking with you soon.
Also you said rent didn't cover the lease amount, well lets think, some rent vs no rent. Which is better?
I can look up some neighborhood statistics for you to help paint a better picture of the situation in your new build, and your current place.
Have you thought about offering your current home as a lease-purchase? Maybe in this market, a good deal for you and for your tenant would be 18 mos or so? You could get a slightly higher monthly payment, and possibly the sale of your home at the end of the term of your lease purchase if you can still carry that mortgage. There are lots of benefits for both the 'buyer' and 'seller' with a well-written and executed lease purchase. In our area, there are plenty of former home owners out here that need a place to stay after they've lost their home to foreclosure when the ARMs went up... A lease-purchase is a good way for them to get back into home ownership.
Also, have you thought about doing a short sale on the new property, instead of just letting it go to foreclosure? If it just rolls into foreclosure, the 'word on the street' is that your credit will take around a 200 point hit. Everyone's credit and everyone's individual house situation is different. It would be worth an attempt, and is another option.
I agree with your advise Robert that Mark should consult an attorney as I suggested and as the others suggested. Perhaps we helped Mark with specifics to speak with the attorney about. Mark has to be the judge of that since this was his questions.
I disagree Robert that Mark should consult a BK attorney... he needs to consult with a real estate attorney and his CPA. A BK attorney would probably recommend a BK as the option... and that might not be the best option.
Mark... I recommend that you speak with your CPA and a Real Estate Attorney to fully assess your situation. You do not have to file a BK to correct your housing issue.
As the other two posters have stated, I am not an attorney. This is not legal advice, and you should consult w/ legal counsel before making decisoins on this matter.
I agree with both Greg and Lori. I wanted to throw out one other possible alternative.
Lori mentioned that a deed in lieu may avoid the deficiency judgement.....
Depending on how you run the numbers, you might be able to short sell the property and absorb a deficiency judgement, since you have a strong income. That, while costly in the payments on the deficiency judgement, may be less expensive than the costs associated with credit damange.
This is a thought for exploration. Run the numbers in various scenarios and consult an attorney before choosing a path.
After all exhaustion if there is no option for you to rent out either home and you know you are going to lose a home then I would go with Greg's recommendation then talk with the bank about a Deed in Lieu of Foreclosure. Although this damages your credit just as a foreclosure does it makes it cleaner and can protect you from a deficiency judgement. Always check with an attorney as I am not an attorney and cannot provide legal advise.
A foreclosure and a deed in lieu of foreclosure can lower your credit score by 200 plus points and will remain on your credit for 7 years. You can rebuild if you keep everything else clean and you could purchase a new home within 3 to 4 years.
I understand that the new property has decreased in value... is this a property that would increase in value once the market improves? Look at each home and determine what will be the better investment when the market turns. Exhaust all options to save credit first... perhaps a short sale on the new homes or perhaps a refi to reduce payments so you can rent that home.
Talk with your CPA and talk with a Real Estate Attorney to discuss all your options and the best option!
Best of Luck!