Foreclosure in 92405>Question Details

Pky, Other/Just Looking in 92405

I want to give my rental property back to the bank it has two moryages

Asked by Pky, 92405 Wed Dec 15, 2010

Help the community by answering this question:


this is not "Legal Advice" However I do work for an attorney and Im a Legal Assistant/Realtor.

A couple of things to consider:

1: Have you tried to modify your loan? Your loan will not qualify for the HAMP program but may qualify for an "IN House" modification.
Depending on who your lender/investor is the may be happy to modify your home and reduce the interest rate and possibly the principal balance depending on the situation.

2: A short sale would be your next best bet if you do not qualify for a modification. There are all kinds of investors/ home buyers who would be happy to buy from you at the current market value, of course depending on the condition of the home.

3: A foreclosure or giving the home back to lender will be the worst scenario on your credit. Also, with the 2nd loan the lender may be able to go after you in a collection situation, forcing you into bankruptcy or paying the loan amount.

You may have alternatives. Doing a loan mod will be the least damaging to your credit.

I did a loan mod on a first and second as well as settled about 5 credit cards for a client. It is less than a year later and his credit score is 640... Way better than a foreclosure or bankruptcy..

Best of luck. Be proactice. the lenders do modify loans but for the most part what I have seen is homeowners submitting incomplete paper work. Or the financials are way out of reality.

JoAnna Jensen
Legal Assistant
Volo law Group Legal Realty
925 699 5041
1 vote Thank Flag Link Wed Dec 15, 2010

Seek a legal and tax consultation. This situation is fraught with liability and must be handled in a way that prevents doing more financial damage to you down the road. (Imagine the banks suing you for any and all losses incurred on account of letting the property go.)
Web Reference:
0 votes Thank Flag Link Wed Dec 15, 2010
The chances of you "giving" the property back to the bank are slim to none, when you have 2 mortgages.

Unfortunately, you did not provide enough information in your question for anyone to be able to go over reasonable options with you. Please give me a call at 424-2HELP12 (424.243.5712) and I can ask a few questions and help point you in the right direction. Do not wait too long. Having complete information about your options and sufficient time to make an informed decision is very important. Call me today. Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
0 votes Thank Flag Link Wed Dec 15, 2010
When you say you want to give it back to the bank I am assuming you want to sign a deed in lieu of foreclosure as opposed to just letting it go into foreclosure. A DIL is not a viable option for a property with two mortgages as the bank would take the property with the junior liens in place unless you can convince the junior to settle for less so that you can deliver free and clear title to the bank. If you have not already done so, seriously explore doing a short sale. Talk to your financial planner and tax adviser as well about the consequences of doing a short sale vs. letting it go into foreclosure or just holding on to the property if that's an option.
0 votes Thank Flag Link Wed Dec 15, 2010
Ute Ferdig -…, Real Estate Pro in Newcastle, CA

There are some serious implications to taking such measures......Our advice to people finding themselves in financial distress is to consider all options prior to making a final decision. Throwing in th towel in frustration can be a mistake for some.

Meeting with an attorney that specializes in real estate may provide you with options otherwise not appreciated that could be better options for you.

Our recommendation is to collect as much information as possible before making a commitment.

Best wishes,

0 votes Thank Flag Link Wed Dec 15, 2010
You really done want to just give it back, you should meet with an agent who is experiemced on short sales and let them ssist you in selling your property, it is a million times better than a foreclsoure. If you would like to keep it but the mrotgage payments are too high, you can even try calling the bank, ask for home retention and see if they can provide a loan modification which lowers your payments. Anything is better than a foreclsoure so before giving up, at least give it a try.

Please see my blog on how short sales work and how to get them approved
0 votes Thank Flag Link Wed Dec 15, 2010
Go and sit down with a real estate lawyer and credit counselor before you do anything you regret or do it in a way that causes you more problems down the road.

Expect to have your credit seriously damaged as a result of this for at least a couple of years possibly longer.

Good Luck, I hope things turn out OK.
0 votes Thank Flag Link Wed Dec 15, 2010
I think your best bet would be to call a local realtor and try to arrange for a short sale. Generally speaking , you will need to document to the banks why you are no longer able to make your mortgage payments. The 2nd mortgagor may ask you to assume a non secured loan to partially pay them back. You can also request a deed in lieu of foreclosure or file for bankruptcy, but I believe the best of bad options might be the short sale route. It would also be a good idea to consult an attorney.
0 votes Thank Flag Link Wed Dec 15, 2010
Don't just give it back! Your lender will probably send a 1099 and you will owe taxes on the whole forgiven amount. At least try to sell it even if you have to do a short sale, that way the taxed amount is less. Check into that before you just walk away! Not to mention save your credit a little bit more.
0 votes Thank Flag Link Wed Dec 15, 2010
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