You are in a situation that is going to require a lot of careful thought before you act. To try to make this simpler, I will start with the end of your question and work backwards.
A foreclosure is where the bank simply takes posession of the house and evicts you. You will lose all of your equity, if any, that is in the home. In the current market, there is a trend of people simply "walking away" from homes in which they have no equity. That process is a "deed in lieu of foreclosure", where you simply tell the bank that they can have the house, and save yourself the court time. In either case, you wind up with no home, and damaged credit.
A short sale is where you have negotiated with the bank to allow you to sell the house for less than you owe. This process can be tricky, as some lenders would rather foreclose than negotiate to save costs. It's best to get on the phone with your lender ASAP if this is the road you choose, as it can be time intensive to have short sales approved. In either of these cases, it's best to discuss matters with a real estate attorney before acting.
There are other options: If you have little or no equity in the house, and your soon to be ex-boyfriend agrees to it, you could buy out his equity in the house, and take sole possession of it. This would allow you to add a roommate (or two, depending on the size of the home) to help with the mortgage, or to simply rent out the entire house, and wait until this unfortunate market (for sellers) passes. If your Realtor is correct, and the current market value for your home has depreciated that much, then there is likely little or no equity left in the property. Talk with your Realtor to see what the home's rental value may be, or figure out if a roommate situation would work, then see if you could get the home's co-owner to "quit-claim" the home's deed to you. You should not need to refinance if you are the only one on the mortgage.
The reason that I bring up the second option is that it will save your credit rating. Being foreclosed upon, in any shape or form, is going to damage your credit report. A short sale, though an option, can be risky, and the bank may foreclose on you anyways if you are unable to continue paying your mortgage. If you can keep possession of the home, and find ways to keep making mortgage payments for a year or two, you should be able to come out the other side in one piece.
As always, make sure to consult with your Realtor, attorney, financial advisor, etc. before making any decisions.
Hope this helps. Good luck!
Now the second issue, you carry the loan and your boyfriend is on the deed with you. I would ask a real estate attorney but I think a foreclosure will only impact you as the mortgage holder and not your boyfriend's credit score.
You may want to change the deed to your name only and rent a room to help pay the mortgage.
What I tell my clients is that this is happening all over and there are people out there that may help. If you are in the city of Manassas you should check with the city because there is a program to help people stay in there homes. Best of luck and I hope it all comes together for you.
Weichert, Realtors, Gainesville
you've taught me a new word... at first I thought "explication" was a typo, but I looked it up and it's the perfect word for your post.
(I'd define it here, but I'm a firm believer that if you look it up yourself, you'll be more likely to remember it, so for any of you who are interested in the definition... look it up)
I believe a little more explication is necessary though. A short sale would be significantly preferable to a foreclosure--if it comes to that. Yes, it's a hit on your credit report, but it demonstrates a level of financial responsibility that just is not there in a foreclosure. There are a lot of "set in concrete" rules by which lenders operate, but there is also a human factor. If you experienced financial difficulty and showed responsibility, some future lender may have the flexibility to take that into account.
The following questions are rhetorical. If you cannot pay the mortgage alone, how did you get approved for the loan in the first place? If the loan was approved based on your income and your X's, why is his name not on the mortgage--and why is it on the deed?
I suggest that you talk with your X and ask that he help make up any financial short-fall in your ability to continue paying on the mortgage. Depending on his answer, you may then want to talk with an attorney about his responsibility.
Unfortnately you are holding the bag.
There is a source that can help you.
Go to my information webpage to learn more.
Go to "Sellers", Select "Save My Home"
All the best,