There are moral values involved in a decision like this but most people don't have them anymore so it really doesn't matter at this point.. There used to be a social stigma involved with foreclosure but that has since been diluted.
All this will continue to lead towards a downward spiral and now your sticking it to your neighbors by walking away and forcing there values as well.
Ok - here I go with my tough love approach / response again!
It's great you have a healthy monthly income and can pay your mortgage!!!! You are very fortunate to be in that position.. I suggest that's what you do for now. Babies are small. I am sure you can manage for a year or two in your loft............I understand your desire to have a single family home, but you have responsibilities to take care of with your loft, first.
I don't see the bank looking at you as having a hardship , as your job and income seem secure (that's great for you!). You simply may be better off to stay put, and make the best of it.
Speaking to a lender might help give you other options, but you say you have already looked into that.
So....should you give the loft up, walk away, and let it go into foreclosure?? Why would you do that and ruin your credit? How will you qualify for a future mortage? That bad credit cloud will be hanging over your heads for a long time. You have a good credit rating now, and you want to turn it into a bad rating? NO!
I suggest you check with your cpa or a real estate attorney to look into the consequences you will have to deal with if you attempt the above actions.
Best wishes to you.........Debbie Rose
How many of his buys went into foreclosures or short sale. I think you should start over. Things have improved from last year. Timing is everything, Loft inventory may or may not be lower. I need to know where you are located. Activity in the building is a good indicator. Everything is on the table, money form parents, bank negotiations, assume a loan for the balance. The last thing you want is a credit problem. Employers now look at credit more closely. You will take a 100-200 point hit. You can't buy for 2 years minimum. FHA is going to 690 next January 1. For, all Condo's and TH's tend to be overbuilt, require less land and more gross profit per acre, good for building business, bad for resale. You have to stay longer to be safe.
List all your options and then do it again. There is one out there.
1. You can allow the home to go into foreclosure. This will result in a hit to your credit score - you will not be able to secure a mortgage from a lender for a period of time (I've heard two years and five years - consult your attorney). Even in foreclosure, your assets may be fair game for settlement of the debt with the lender - again, consult your attorney.
2. You can attempt a short sale. This requires approval of the lender and is a highly unattractive process (in my opinion) - fraught with delays and pitfalls. Even after receiving an offer which you find acceptable, the lender may take more than 6 months to act on the offer and close the sale. You will likely find that the price you get for your house is lower on a short sale than it would have been if you sold it without stipulation and made up the difference (tapped your savings or credit to pay off the note) at closing. In addition, the lender may require you to pay the deficiency (the amount you are short) by some arrangement - this is where negotiations with your attorney and a short sale professional will be invaluable to you.
3. You can sell your property for market price, even if that is less than the balance on your mortgage(s) and make up the difference at the closing so that the lender is paid in full and all closing costs for which you are responsible are also paid. This does NOT constitute a short sale and it will NOT affect your credit. It also does not have to be advertised as a short sale, giving you a better chance of securing an acceptable offer in less time. However, it DOES require you to pay the difference between the selling price and the amount remaining on the note(s) - and any closing costs. That fact would also need to be disclosed to the Buyer at the time the offer is accepted.
For the sake of your credit worthiness and FAR fewer hassles with selling (this is already a very challenging market), I would recommend Option 3, if it is financially possible. "Walking away from a property" is a horrible misnomer and will leave you in far more financial/credit trouble than simply staying in a property which no longer fits all of your needs. If you want to sell, pay your debts. If you can't do that, my recommendation would be to hold tight and make your move when you DO have the means to make the numbers work without lender assistance.
That's likely not the answer you wanted, but it's the best advice I can offer. Good luck.