We have an upside down mortgage on a rental property. What are the options?

Asked by Ethi, 30312 Fri Mar 9, 2012

Our rental property has dropped from $333,000 to $155,000, and we can't afford to hold on to it. How do we get rid of the property? Can't afford to keep making monthly payments.

Help the community by answering this question:

+ web reference
Web reference:

Answers

8
Jeffrey S Spatz’s answer
Jeffrey S Sp…, , Atlanta, GA
Mon Jan 14, 2013
Just to jump on the band wagon here, Harp 2.0 may help you if your are currently in a Freddie or Fannie Loan. Call your lender and they should be able to help you out in identifying this.
0 votes
David Herren, Agent, Atlanta, GA
Mon Mar 19, 2012
I'm confused. If you purchased this as a rental property, did it have positive cash flow then? What has changed?
0 votes
Gwen Harvey, Agent, Atlanta, GA
Tue Mar 13, 2012
First call your lender and advise them of your situation. See if there are any programs or options they can offer you. If they are not able to assist you and you are not able to keep the property any longer, a short sale could be an option. You would then need to check with the lender to see if they will accept a short sale and then contact a realtor to list the property.
Web Reference:  http://www.gwenharvey.com
0 votes
Robert Robbi…, , Atlanta, GA
Sun Mar 11, 2012
Ethi,
Believe it or not this next Weekend the HARP 2.0 expanded approvals are supposed to take place effect.
When this happens it is going to allow home owners who are drastically upside down the ability to refinance.

I you truly only wish to sell then please ignore this but if you would like to make your payments more affordable then please continue to read on.

For the last year we have been helping a few people who were Slightly upside down on their homes. Former max CAP was 105%
Example: they owe 105 but sales are 100 we were able to help last year.

At the start of the year this increased to 125% CAP upside down. Finally on March 17th the computer Underwriting System that almost ever bank adheres to is "Supposed to" Remove any CAP. This seems that it could be the relief you where looking for.

I currently have customers Refinancing FHA loans as a "Streamline" FHA requires NO APPRAISAL or INCOME review if your last loan was FHA and you are to a new FHA (they use the previous set years ago Value as the appraised value now and leave it at that)

Here are 2 links below that you can find out for yourself if your home is Serviced by one of the 2 participating groups that back up Conventional loans. fill out the questionnaire carefully as abbreviations, familiarity ect.. can reject your submission as a "No Match" use legal names to fill it out.

http://www.fanniemae.com/loanlookup/
https://ww3.freddiemac.com/corporate/

If your a "Match" or are already and FHA borrower, contact me and I will assist you in finding Rates and Closing Costs to your satisfaction. Call for rates

I hope that this has been helpful.
Best Wishes,

Rob

Rob Robbins
Senior Mortgage Consultant
Cornerstone Mortgage Group
6151 Powers Ferry Road NW
Suite 610 Atlanta GA 30339
Office 678-578-7613
Cell 404-932-5353
rrobbins@cmghl.com
0 votes
davidwbrower, , Woodstock, GA
Fri Mar 9, 2012
You say your house has dropped in value? How do you know what it's worth? Also, If you were renting it at $333,000 and covering your mortgage, what has changed? Is it still rented? Why can't you make monthly mortgage payments on a rental property if you are collecting rent? Is your tenant's rent covering payments? First off, don't be like many other low-life landlords and stop paying your mortgage payments while continuing to collect rent. Here are your options to get rid of the property or fix the situation:

1) Re-negotiate your loan terms as Bill said below.

2) Attempt to sell it as a short sale as Ms. Baez stated below.

3) Give it back to the bank through a deed in lieu of foreclosure.

4) Stop paying it and let the bank take it back through a foreclosure.

5) Keep renting it and keep paying your mortgage payments. Eventually, your principal will get low enough to sell for what you owe on it. What's it matter what it's worth if someone else is paying your mortgage through renting it?
0 votes
I am in a similar situation,the reason is you can not collect the same rent you were charging when prices were up,because the guy down the street that bought the property for one fourth has a lot lower mortgage payment than i do therefore he can rent his place for half of what i need to pay the mortgage.
Flag Thu Jun 6, 2013
Richard Burt…, Other Pro, Alpharetta, GA
Fri Mar 9, 2012
Ethi,

What is your current rent? And how does that compare to your mortgage payment? If you have not checked comparable rents in your area you may want to. Rents have been increasing.

I have no idea if your rent is close to your mortgage. If it is you may want to continue renting the property. Or do a lease purchase where you get a decent option payment up front. Your lease purchase price depends on what you owe on the home.

How long have you owned the home? What is your mortgage balance? Answer these questions and it will help point you in the right direction.

If you have any questions, please or email - 678-488-0183
0 votes
, ,
Fri Mar 9, 2012
Holy cow! Where do you live where you lost 50%??!
If it were me, I would get an appraisal done on the house. Then I'd call the bank and ask them to reduce the payoff on the note and refinance it using the Harp loan. This does NOT damage your score like a short sale or foreclosure would. See, if the FDIC finds out that your house is that far upside down, they'll force the bank to reduce the pay off. Why? Cause they're insuring it. Everone thinks BOA is being nice about reducing the notes on their clients by as much as $200k. Its not them, it's the FDIC doing that. If that doesn't work, then call Ms. Baez since she was the first to answer.
0 votes
Laquita Baez, Agent, Atlanta, GA
Fri Mar 9, 2012
a short sale may be one option you can work out with your bank,,,,
you can contact me for more info.
Web Reference:  http://www.LAQUITABAEZ.com
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more