That sounds horrible. I understand where your lawyer is coming from. First talk to a financial advisor/tax professional about your options. I agree with Diane...
This years projections fo rforeclosures as far as all the stats I have read have been 1.7 million foreclosures. In San Diego County alone last year the total was around 27,000. I have a feeling that the credit scoring situation may change drastically. If by the end of this housing crisis, huge numbers of people will have credit issues. Who knows in 2010, the score of 450 may seem great!
I wish you all the luck in the world!
PS.. I came across a great guy who has had success with getting short sales approved with homeowners who are current with their mortage,utilizing a real estate attorney. If you would like a refferral to him, feel free to contact me.
http://www.abellre.com

Thu May 15 2008, 17:16

Sorry to hear about your situation. I think the lawyer may be advising you not to put good money after bad. Many of the condo complexes in Oceanside have so many foreclosures that it's difficult to sell at any price. If you put money into making it habitable it doesn't increase the price you'll be able to get. Some HOAs are also barely surviving because they aren't receiving the income from the units in foreclosure so if you sue, what would you be able to collect? Is your HOA flush with cash reserves? You didn't indicate if any others in the complex are also having construction issues, but that could also be a factor. For your other questions: I just had someone buy a house before walking away from their other one. They are also trying a short sale. They weren't keen on walking away either, but sometimes that may be your best choice. A foreclosure will be on your record for 7 years. There's no set timeframe for a short sale. The lender could give you a 1099, but it's part of the negotiation of how they'll report it with a short sale negotiation. Many have not ... so far. Years from now there's going to a lot of people with the same blemish on their credit report. Who knows how lenders will look at it then? Lenders will lend on a bankruptcy after a year in today's market. None of us have a crystal ball. Best of luck to you!

Diane Conaway, RE/MAX United

Wed May 14 2008, 16:11

Advice: Get another lawyer. Then get a financial advisor.

Sounds like a difficult situation. However, it sounds as if there are construction/structural issues and the HOA is unable or unwilling to do the job properly. I'd put an aggressive lawyer on them, first. Get the unit in decent, livable condition. Even consider paying for an expert yourself to analyze the situation.

Next, if you're in decent financial shape (you say you are "good financially" and you're talking about "just buying a house") it's highly unlikely your lender would approve you for a short sale. You have to show financial hardship.

The lender's lived up to its end of the bargain. Why would you then want to punish the lender?

Further, with the problems you've had with your unit, you might be further upside down than you think. I don't know what the disclosure regulations are in Oceanside, but if you disclose the problems, and disclose that they haven't been corrected, it might be difficult to sell at any price. That brings us again to the issue of determining and fixing the problem.

If you did a short sale, you might not be able to purchase for longer than 2 years. There isn't a magic "2 year forgiveness" on short sales. "Walking away," though, would be even worse.

Get a new lawyer. One that makes a pit bull look timid. Then go after the HOA and get the problems fixed. Four years is way too long to endure what you have.

Hope that helps.

Wed May 14 2008, 15:04