Foreclosure in Newark>Question Details

Techzone12, Home Seller in New Jersey

I am in NJ. I have a house that I bought in 2004. I moved from that area, so I had to rent it out. The house

Asked by Techzone12, New Jersey Tue Apr 1, 2008

value right now is less than the loan. My question is: Can the bank garnish my wages if I foreclose on the house. I have no interest in keeping the house, since I am loosing money (rent paid to me is less than mortgage payment). I need to get this monkey off my back, any advice will be appreciated.

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If you foreclose on this house, you will not be able to buy another one. Just sell it, do the short sale and move on. Right now, you are losing probably more money on the loss between rent and mortgage than you would've if you sold it for less than you wanted. Plus taxes. Just sell it, no matter the price. The damage a foreclosure can do to you is not worth the price if you can help it.
1 vote Thank Flag Link Wed Apr 2, 2008
Yes I agree with Anthony you dont want to just walk away from it, Uold it for awhile or sell it in a short sale.
1 vote Thank Flag Link Sat Apr 12, 2008
You can either talk to the lender and work something out or do a short sale. If they foreclose on the home, chances are they will not get enough from the sale to satisfy your loan. They will seek a deficiency judgment against you for the difference. A foreclosure is devasting to your credit and you will not be able to buy another home. A short sale hurts, but not as bad as a foreclosure.

In a short sale, lenders will not seek a deficiency judgment for the remaining debt. Just make sure they put it in writing. They will, however, report it to the IRS. IRS does consider that as income and you will be taxed since it is considered as an investment property. It is best to speak to a tax consultant on this issue and/or attorney.

If you have any questions or concerns, please feel free to email me at anthony.robaina@hotmail.com.

Good Luck!
1 vote Thank Flag Link Wed Apr 9, 2008
Talk to the bank, maybe you can work something out with them. I had spoken to a person in the same situation. She wanted me to help her with a short sale, I helped her contact the bank and they worked out a deal.

Everybody will lose in foreclosure, so the bank may work with you to reach a solution.

I hope it works out for you.
Contact them immediately and ask for help, you may be surprised.
1 vote Thank Flag Link Tue Apr 1, 2008
Are you behind on your mortgage payments? If so, perhaps you can work out a short sale with your mortgage company where the house is sold for less money that what you owe on it. You would hire the services of a realtor and you would have to give your mortgage company permission to speak to the realtor and they would attempt to successfully negotiate terms of a short sale with your mortgage company. Not always the best route to go but better than a foreclosure. Is the rent you are collecting at least covering the mortgage payments? If so, you should try to keep the house and at least you'll be keeping the mortgage current. Late mortgage payments and/or foreclosure can be detrimental to your credit.

Good Luck!

Gina Chirico
PNJP-Caldwell
973-228-1000 ext 132
GinaChirico@PruNewJersey.com
1 vote Thank Flag Link Tue Apr 1, 2008
why did you buy the house in 2004?
keep the house
not a good time to sell a house
in most states the bank will get a deficiency judgement against you
for example say you have 200k loan
the house foreclosed
if the bank can only sell it for 150k
they want 50k from you, plus the cost of foreclosing, attorneys, etc
you may want to talk to a lawyer
to see what the laws are in your state

anyways

good luck
1 vote Thank Flag Link Tue Apr 1, 2008
Techzone the bank can not garnish your wages but you could be subject to a deficiency judgement as Anthony stated in his well stated answer. I've attached a link to an article that was recently published in the Wall street Journal regarding Short Sales, but it not addressing the ownership perspective of an investor.
In order for the bank to consider the short sale you will be required to show hardship, going back a couple of months on your bank staements. It's cost effective for the bank to avoid foreclosure but make sure your finances don't show ability to make payments going forward. So speak with your lender and you can possibly do a short sale or "Deed in lew of Foreclosure" to get out from under this Monkey. ghood luck
0 votes Thank Flag Link Tue May 6, 2008
To answer the question that you asked - the bank cannot garnish your wages.

Real estate agents will tell you to go for a short sale. This is what I would do:

1. consult an attorney
2. quit paying the mortgage
3. give your teanats a good lease
4. keep collecting the rent until the bank says to stop

As long as those tenants have a lease they will have more rights than you will. The bank connot eveict them until the lease is up.

I'd mail the keys back to the bank and call it a day. You can shed that debt (and any other unwanted debt) by filing chapter 7 bankruptcy.

It's a LOT less hassle than dealing with the bank and all that comes with it.
0 votes Thank Flag Link Tue May 6, 2008
Hi Techzone12: very important: keep current with your mortgage payments! if you are current you can possibly work with the bank. if you get delinquent you can quickly lose control of the property and ultimately lose the property, your investment and your credit rating. you may be able to renegotiate the loan. where is the property? i represent a company that has 94% success rate in avoiding foreclosure and working out short sale with banks. how did you determine value?
Web Reference: http://www.GWalsh.com
0 votes Thank Flag Link Fri Apr 18, 2008
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