Aaron, Other/Just Looking in

I have a condo, i want to buy a house. what if i have to foreclose on the condo after i buy the house? can they come after me?

Asked by Aaron, Tue Sep 20, 2011

I'm having my parents co-sign on the new house, but the condo has nothing to do with them. I hope I won't have to short sale or foreclose on the condo, because it's upside down about 50K.

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Have you discussed this with your lender? Cosigning on a house is not the same as a car, and the cosigner is equally responsible for the debt. You must be able to afford both places on your own and have equity in the condo. Banks are aware of this scenario and will protect themselves.
Talk to a lender about your plans before you get too far along. I don’t think, based on what you have provided here, that you will be able to do this.
1 vote Thank Flag Link Tue Sep 20, 2011
It would be a shame to go to foreclosure and you can completely avoid it with a short sale, check out http://www.shortsalespeople.com for free short sale information
0 votes Thank Flag Link Thu Dec 8, 2011
Seek legal advice on this. Also become familiar with Recourse and Non Recourse laws.
0 votes Thank Flag Link Thu Dec 8, 2011
Hi Aaron,

You need a legal and finance professional advise. Please email me directly, I can referral someone to you who can give you a correct answer.
0 votes Thank Flag Link Wed Sep 21, 2011
Hello Aaron,
Talk is cheap, the I.R.S. in NOT! I am not trying to scare you, but no one is going to pay your bills if this goes wrong for you. Get legal advise and C.Y.A. Find out who is responable for the taxes on the loss, and if the bank can come back after later, even if you have a letter for their loss? The Realtor is right, we can not give financial or legal advise, but we can and should advise you to do so.
0 votes Thank Flag Link Tue Sep 20, 2011
I hear what everyone is saying about "buy & bail" & fraud. But what you're trying to do still can legally be accomplished. I have clients who have done this & they all have their own legitimate reasons.

For example, I am helping a couple to short sell the condo, the wife was single when she bought the 1b condo, then she got married & they purchased a home together, now they're short selling the condo because they can't afford both places when the husband refuses to keep inserting funds into a sinking ship.

The bank is well aware that the wife was a co-borrower on the new house because they had to list it on their financial statement, they aren't trying to defraud the bank. Our short sale is now approved.

There's a lot of misinformation out there about short sales. Aaron, I would like to talk to you about your own unique situation & how to go about buying & what to do with the condo, I know I can give you some good advice. **Please email me directly as I don't look back on this same Trulia thread for answers posted after mine.

Bottomline: It's all about disclosure to the bank, if they'll agree to take the hit on the short sale, they'll agree & write off the loss at the end of the day.

562-430-3053 c
Realtor Since 1996
Main Street Realtors
Short Sale Expert
0 votes Thank Flag Link Tue Sep 20, 2011
Hello Aron:

That is a valid question. On the other hand, it is legal in nature, and it should be directed to a real estate attorney, as real estate agents, we are not in the position to give you legal advice. On the other hand, if you buy a home with your parents, and rent out your condo so you do not have to default on it, you will be in good shape. Let me know if I can help you further.
0 votes Thank Flag Link Tue Sep 20, 2011
That plan won't work, but you do have some other options. How much is your condo worth compared to what you owe? How much are your housing payments compared to how much rent you could bring in?
Have you tried to do a loan modification yet? There are several other strategies that might work to help you accomplish your goals depending on the answers to these questions.

Kevin Sanderlin
0 votes Thank Flag Link Tue Sep 20, 2011

No can do. After the short sale you must wait 2 years to repurchase. Nice try.
0 votes Thank Flag Link Tue Sep 20, 2011
Have you thought about renting out the condo?
0 votes Thank Flag Link Tue Sep 20, 2011
They will be able to come after you for fraud if you are able to make the payment before you buy the next home. This is referred to the buy and bail. It would be better to sale your condo and then buy a new home. feel free to contact me direct for further questions.
0 votes Thank Flag Link Tue Sep 20, 2011
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