Foreclosure in Seattle>Question Details

Sarah, Home Seller in

what will happen if we allow our condo to foreclose?

Asked by Sarah, Wed Sep 24, 2008

My husband is leaving me for a woman he has gotten pregnant. We own a condo in Seattle, WA. Neither of us can afford the condo by ourselves, and needless to say, it is hard for me to be there and I do not want them living there. We have a mortgage with Countrywide (80%) and a HELOC (20%) with a different bank. I understand that in WA if the foreclosure is a non-judicial foreclosure, then there can be no deficiency judgement on the primary loan, but what about the HELOC? if we foreclose on this, and the bank sells it for less than we owe, will we be required to pay whatever is left on the HELOC? or does that count the same as the primary mortgage? We can't live there, we can't rent it (cap on building) and our realtor told us that it is unrealistic to think we will be able to sell it (there is an identical, but nicer, unit already for sale in our building that has been unsold in 100 days). help?

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Sarah,

You need to work with a full time Distressed Home Consultant. Much of the below responses are inaccurate; You do not need to worry about your 1099 (see MFDRA 2007) or a deficiency judgement (WA state law), nor should you waste your time trying to "negotiate down" your HELOC as banks will rarely do this. There is a much better way to deal with your situation. Given your current situation, your lender and your 80/20, you should have no problem avoiding foreclosure and getting back on track.

Feel free to visit http://www.seattleshortsaleblog.com. My contact information can be found there. Avoid foreclosure at all costs, so whether its me or someone else, please contact a short sale expert immediately and have them suspend your auction date.

To the agents below: If you have any questions regarding my above comments, feel free to contact me.
0 votes Thank Flag Link Sat Sep 27, 2008
Sarah
I would do everything in your ability to not have a foreclosure on your condo. Although difficult if your husband is able to live there and make the payments until the market picks up that would be the first choice. If not I would contact both lenders and see what they might be able to offer you to help you hold out until the market picks up and you can sell. If they do not offer any compromise or restructuring of payments then I would put the condo on the market as a short sale. If you need a contact from Countrywide e-mail me and I can give you someone who might be able to assist you. Most banks do not want these properties and will work with you to implement a sale. Good luck and let me know if I might be of further help.
Mary Sunde
0 votes Thank Flag Link Thu Sep 25, 2008
Sarah
I would do everything in your ability to not have a foreclosure on your condo. Although difficult if your husband is able to live there and make the payments until the market picks up that would be the first choice. If not I would contact both lenders and see what they might be able to offer you to help you hold out until the market picks up and you can sell. If they do not offer any compromise or restructuring of payments then I would put the condo on the market as a short sale. If you need a contact from Countrywide e-mail me and I can give you someone who might be able to assist you. Most banks do not want these properties and will work with you to implement a sale. Good luck and let me know if I might be of further help.
0 votes Thank Flag Link Thu Sep 25, 2008
Sarah you are probably going to want to consider a short sale. Simply walking away from the condo is going to cause more problems down the road. If your Realtor is experienced in short sales this might be your best option at this time. If your agent is not able or willing to do a short sale, drop me a line.
0 votes Thank Flag Link Wed Sep 24, 2008
Sarah,

The easy way out is getting so much recognition it is scary. Most people going the rout of a "foreclosure" don't really understand the full extent of their actions....Be sure, if you have no other choice, to be certain you completely understand what this means to you and your credit both now and in the future.

Be sure you are informed....

Good luck,
The "Eckler Team"
0 votes Thank Flag Link Wed Sep 24, 2008
Sarah i am sorry to hear of your situation, you will be held responsible for the second mortgage, it will get wiped out at a foreclosure auction and they will look to you to pay it. if you have no ability to pay they will send you a 1099 and you will have to pay the irs teh taxes as if they write it off it will be treated as a gain. your bets bet is a short sale, find a broker experienced in short sales an start the process right away, if you negotiate right, you will not have to pay and deficiency balance. good luck sarah
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Wed Sep 24, 2008
Hello Sarah,

First and foremost, I'm sorry to hear about your situation and wish you the best with it. Have you looked at possibly trying to short sale the property, it could be a better alternative than a foreclosure. Although I'm not in your area, perhaps getting a second opinion from a short sale expert may shed some light on your situation.

Good Luck,
http://www.C21Infinity.com
Web Reference: http://www.C21Infinity.com
0 votes Thank Flag Link Wed Sep 24, 2008
If you foreclose on your home you will have foreclosure on your credit for 7 or more years. We may be able to negotiate with the heloc to accept less if you get an offer. You can do what they call a short sale. If you price the condo right you may get an offer. It is always worth a try. I would be happy to help you with selling your condo. Give me a call or email. 206-714-1384 kjackson@johnlscott.com
0 votes Thank Flag Link Wed Sep 24, 2008
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