I bought my house for $615,000. 80% is interest only and twenty percent is principal and interest. Now the

Asked by Frank Villalba, San Diego, CA Wed Jun 25, 2008

price went down to $475,000 and if they foreclose my house should I pay any amount to the lender. Please advise.

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8
Roy Mason, , San Diego, CA
Sat Dec 20, 2008
IF you want to keep your home, look into doing a loan modification. RATES are so low! IF you cant afford the home , GET an agent and do a SHORT SALE, IM here in San diego, Call me if you like

CALL THE BANK, SEE WHAT YOU CAN WORK OUT with them or Contact someone like myself if your having no luck with them, There are also govenrment agencies that offer help and advice. Yes you are responsible to pay them, but dont pay ANYTHING., make payment arrangements first
1 vote
Jeffery, , 28273
Wed Jul 23, 2008
Yes, you are responsible for the difference if the property only sells for 475k at foreclosure. Your documents state that you have to pay back the amount you owe, not just the value of the property. It's up to the lender the extent of collections efforts they take. It disturbs me that many of you so-called "mortgage pro'" don't know this. Part of the reason with the f/c crisis now is the mis-information or the lack of information given at the time of origination.
1 vote
Mike Lewis, Agent, San Diego, CA
Sun Jun 29, 2008
No. When your home is foreclosed on it becomes the banks. That was the agreement you had with the bank when you signed the loan docs. Consult your attorney for legal adivice. I would not pay the bank anything.

Mike Lewis
1 vote
NonRealtor, , 23456
Thu Jun 26, 2008
Frank,
On the bright side, renting is easy, stress free, maintenance free, and probably 1/3 the cost in your area. Good luck
1 vote
fredeckert, Agent, San Diego, CA
Wed Jun 25, 2008
Frank,
If you have loans against the property you live in and your have a notice of default filed, you must check to see which lender is foreclosing. You might have a first, second, third, etc. and / or heloc (home equity line of credit. Depending on your lender and the loan terms/circumstances, they may have some right to file a judgement against you, so checking witha a real estate attorney is advised (you can call Brian Cain at 858.277.2122 for advice). There is a moratorium on debt forgiveness (IRS 1099) up to 1 to 2 million dollars for owner occupied properties thru 2009. Contact the lenders as soon as you can, and ask for options to avoid foreclosure. A shor sale or the other options available to you can be found at
http://www.hud.gov/foreclosure/index.cfm
In your question, you don't really say your complete circumstances, or give specific loan information, so what I gave you is general information.
0 votes
Robert T. Bo…, , San Diego, CA
Wed Jun 25, 2008
Frank,

Do you need to sell? Do you have an ARM that is adjusting? I presume yes, otherwise the best option may be to simply keep up on your payments, keep your home, keep your credit clean, and wait for the market to rebound.

Denise offers some good advise.

The 1099c that Laarni refers to is that debt relief is considered income. It would only be computed on the difference of your loan amount and the amount the bank gets (not the difference in price). However, I believe all that is moot because a temporary law went into effect to assist with our national housing woes; the government will not tax debt relief this year. As always consult your CPA for tax related questions.
0 votes
Denise Gleav…, Agent, Claremont, CA
Wed Jun 25, 2008
Hi Frank,

If this is your principle residence and you would like to keep your home, you need to know there are options for you... 1) workout programs with your lenders 2) Deed in Lieu of foreclosure 3) Short Sale 4) the foreclosure. There are a lot of things to know about all of these options. You should discuss these options with your realtor and see which one may be the best for you.

You definitely need to contact a real estate attorney and a CPA to review all the possible tax consequences.

If you have assets (available cash in savings and or checking, 401k, stocks & bonds, equity in another property) then the lender can seek financial restitution.

If you have any more questions, please feel free to contact me at 858-565-7777.

Thanks, Denise Gleavey
Coldwell Banker
Web Reference:  http://www.IHandleRE4U.com
0 votes
Laarni G. Om…, , Orange County, CA
Wed Jun 25, 2008
Hi Frank,
If you get foreclosed, the lender MAY send you a 1099c to state that the difference between the 615k and 475k is your income. But I don't think that you need to come up with any money to pay the lender because your house is under the Deed of Trust. If you are still confused, please consult a Real Estate Attorney.
Don't fret, organize your thoughts and you'll find better answers.
All the best to you,
Laarni
0 votes
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