Foreclosure in Kensington>Question Details

Gprice55, Both Buyer and Seller in Littlerock, CA

I have a rental worth 90,000, with a mortage of 145,000., and losing 200. a month on rent, no job, no back up money, should I give back to the bank

Asked by Gprice55, Littlerock, CA Mon Aug 29, 2011

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I think you should consult your financial advisor and atty.
0 votes Thank Flag Link Sun Oct 2, 2011
First, you can't give it "back to the bank." It wasn't the bank's to begin with. (Just wanted to clarify that.)

So, what do you do with it?

I've listed some options below, generally beginning with the most desirable and ending up with the least desirable.

Are you sure you're renting it at full market value? That is, could you raise the rent a bit and narrow your loss?

If you can't do that, you could consider trying to sell it as a lease-option. Under that arrangement, you probably can charge somewhat more than fair market rent, with the remainder being credited to the purchase price. The problem, though, is that there's a big gap between what you say it's worth (have you verified the $90,000--it might be worth more) and what you owe.

Another possibility: You might be able sell "subject to" to an investor. That'd be risky for you, but still something to consider. You'd deed your property to an investor who, in turn, would promise to make your payments. However, an investor would be reluctant to assume a $200 a month negative cash flow, so he/she likely would be looking for some way to maximize income (such as lease-optioning it).

Another possibility: Loan modification. You'd ask the bank to modify the terms of the mortgage to make it more affordable to you. Those are uncertain in the best of situations. If you have no job, then there'd be little assurance you'd be able to meet the terms of any modified loan. So that would reduce your odds of a bank agreeing to a loan modification.

Another possibility: A short sale. Not desirable, but better than a foreclosure. Your credit would be negatively affected.

Another possibility: Deed in lieu of foreclosure. That's pretty much what you'd mean by "giving it back to the bank." Again, it was never the bank's to gegin with. Youl'd be asking the bank to accept the deed in lieu of foreclosure. It'd be up to the bank to decide whether it wanted to go that route. Your credit would be negatively affected.

Another possibility: Foreclosure. The least desirable alternative.

Talk to a good Realtor in your area. Your local conditions may suggest one option more than another. Or there may be some additional possibilities I haven't listed above.

Hope that helps.
0 votes Thank Flag Link Mon Aug 29, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
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