Foreclosure in 33141>Question Details

Michelle, Renter in Effort, PA

I have received an act 91 notice in july we pay pmi fees and have moved out my lawyer says to rent out the house to profit ubtil the house forecloses.

Asked by Michelle, Effort, PA Thu Nov 3, 2011

i feel like we are putting ourselves at risk i have planned to apply for deed in leiu. we did the making home affordable and it only made things 10x worse!! the principle on the home was increased by around $20,000.00!! which puts us WAY upside down!! i am waiting for a notice from the sheriff that my lawyer says will have a court date on it and then i can rent it out and apply for the deed in leiou before it goes to court. We live in PA any ideas? I have a 2 year old son and i just want to have a home that we can afford without having to rotate what bills will have to be late so we can make our mortgage payment. We are 6 months past due and living in a rental I still cant sleep at night we are so scared i just need some advice!!

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Is your attorney telling you to rent the house and not make mortgage payments? If so, that doesn’t sound right to me. Especially if the tenant is not aware the home is in foreclosure.
2 votes Thank Flag Link Fri Nov 4, 2011
If the advice that your attorney gave you was to not pay the mortgage and "abandon" your home by renting the property, then I will suggest that you get a second opinion from another attorney. Unfortunately, each situation, and hardship is very different, but I will tell you that "rent" is income that you are earning and this may need to be declared at the end of the year... you also should obtain advise from your CPA.

I am aware that most of the hardship programs, like HAFA, state very clear that you must be living in the property... in order to qualify for such program...from this make you own conclusions. Wish you the best of luck.
1 vote Thank Flag Link Fri Nov 4, 2011
Hi Michelle,

I am assuming you discussed all available options to you with your attorney, to include a possible short sale? Being upside down is an unfortunate situation for many home owners these days with many being $60k-$100k under water. However, I understand by your post you have not paid the mortgage payment for nearly six months but you are renting instead. The rental income your attorney is suggesting you get would most certainly off-set your rental payments, plus you have six months of what would have been mortgage payments in the bank.

I am unclear as to why you moved out of the house although you are six months past due. The processes leading up to a foreclosure can be lengthy and may take months or a year or two to complete. I can only gather that you may have been advised to move out and then rent the property for the extra income until foreclosure date. At the end of all this I would assume you will have a nice sum of money put away to rebuild on your housing future.
1 vote Thank Flag Link Fri Nov 4, 2011
HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA. A list of servicers participating in HAMP (including HAFA) is available at:…

1 vote Thank Flag Link Fri Nov 4, 2011
Michelle, even those that you want to put your property in a situation with deed in leiu, bank is going to process your credit in foreclosure way. I suggest to you to make a Short Sale, your credit maybe is going to be affected for a short sale or if your loan is insure with MIP bank can release you completly from your debt. If this is your homestead property you have the right to fight back with a PROGRAM CALL HAFA, see all in their web. Ask your lawyer to verify your home documents and them take that chance. It's better for you. Sweet Heart you don't need to be scared. Many homeowners up-to-date is having the same situation.
RIGHT HERE IS THE LINK. Another is THE HAMP. You maybe can save your home too.…

Everything in life has a solution. I hope you have a good day and sleep well at night. THERE IS A SOLUTION FOR EVERYTHING
1 vote Thank Flag Link Fri Nov 4, 2011
Follow your attorney's advice or if you question his advice then find another attorney. That is your best answer. That's why we hire attorneys, so we don't have to worry about things because they should be giving you prudent advice.

My tenant actually recently got $35k from Chase as an incentive for him to complete a short sale. He was an owner/occupant so I'm not sure if you could get a similar cash incentive if you've already moved out of the house.

All the best,
0 votes Thank Flag Link Fri Nov 4, 2011
Good Morning MIchelle,

As an agent here in Miami, I have worked with many sellers in your current situation, and it clearly is a very tough time in your life and one that I can assure you will pass. Many homeowners find themselves in this situation, and you need to sit with your attorney and find out what your options are. It does appear you have already tried a modificatin and that just seemed to add to the problem by adding more to your mortgage balance. From what I can see you can do the deed in lieu, if that is what your attorney has advised. Another option you have is to contact your lender and ask what their procedure is for you to place your home on the market for sale, as a short sale. Depending on the lender and your reasons for your inability to meet your mortgage obligations, you may still qualify for assistance for relocation, even though you have already moved out. The banks prefer to deal with a short sale than going all the way through a foreclosure as it yields them less money. Based on what I have been encountering with the bank now on the short sales, they are moving a lot faster at approving them, and even waiving the right to go after the homeowner for the balance that would be remaining due to the short sale. Once the bank has advised you on how they want the short sale handled, you can find a local Realtor to list, market and sell your home.

The choice is your on whether you rent out the home based on your attorney's advise, but just know that it may then complicate things just a bit if you go under contract with a buyer. What then do you do with the tenant? As the owner of the home you do have the right to rent out the property, but just keep in mind that this too can bring you some additional stress you many not need at this time.

I wish you the best of luck on getting this behind you in the shortest amount of time possible.

Lila Lopez
RE/MAX Advance Realty
0 votes Thank Flag Link Fri Nov 4, 2011
Your should list your property as a short sale right away. It is the best solution for your credit scores and the quickest financial recovery. If you have stopped making your house payment, just bank that money every month. You will need it to move and get your own rental. In our market first month, last month plus security is the rule of thumb. You will want your agent to make sure that the property you are renting is financially secure. Find a local realtor to you and get it on the market right away as a short sale.

Debbie Albert, PA
Kellwer Williams Port St. Lucie
0 votes Thank Flag Link Fri Nov 4, 2011
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