I live in nj and own a one family house. if the bank foreclose will i still have to pay fha back.

Asked by House101, Irvington, NJ Fri Jan 21, 2011

I requested to do deed to lieu and the rep said i would first have to apply for a modification and then a short sale. I really want out, but will fha came after me for the loan.

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Marsha Bowen…, Agent, Livingston, NJ
Sat Jan 22, 2011
You have received some great information from the agents here. As in most cases, the lenders do require you to apply for a loan modification prior to moving forward with the other options. FHA has a loan modification program that follows similiar guidelines to the MHA (Making Home Affordable) government program that you could qualify for.
If you need additional information, feel free to visit my website on these and other programs.

Best of luck to you.
1 vote
Gina Chirico, Agent, Fairfield, NJ
Sun Jan 23, 2011

You've received some good information below. Obviously you do not want the property any longer since you said you wanted out but if you do want to retain it, applying for a loan modification is a wise decision. Depending on your income, hardship, etc. you may qualify and usually during the loan mod process, the bank will temporarily hold the foreclosure action.

If you truly do not want it and the bank will not accept a deed in lieu of foreclosure, unfortunately, you can either follow the steps the bank is proposing or do nothing and eventually they will foreclose on the property. With that being said, typically the bank will ask what your intention is (to keep the property or not). If you don't want the house any longer, I can't see them forcing you into a loan modification.

As recommended below, a short sale may truly be your best option. The bank gets partially paid and most likely you can negotiate with the bank for a full release.

Good luck,

Gina Chirico, Sales Associate
Lattimer Realty
973-715-1158 cell
973-575-6353 ext 17 office

As always, Essex County Real Estate at its BEST!
0 votes
Jerry Barker, Agent, Atlantic City, NJ
Sat Jan 22, 2011
Eli, how do you short sale the property without ruining your credit? I dont know anyone who has had to pay back anything to the bank after they had their house foreclosed.
Web Reference:  http://www.sjrates.com
0 votes
Eli Givoni-S…, , Boca Raton, FL
Fri Jan 21, 2011
You would need to ask an attorney if NJ is a recourse state.

Why would you let your property go to foreclosure and ruin your credit? You can do a short sale. We are a professional short sale service. Please call us directly to discuss your specific situation. Our services are FREE to homeowners. We look forward to hearing from you.

Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states
0 votes
Anna M Brocco, Agent, Williston Park, NY
Fri Jan 21, 2011
Before considering any foreclosure, etc., do protect yourself and any other assets you may have, and consult with an attorney who specializes in specializes in real estate--most professionals do offer a free consultation--or if you cannot afford one, contact your local Legal Aid Society and or Bar Association for a pro bono attorney--free.
0 votes
Larry Sarlo, Agent, North Wildwood, NJ
Fri Jan 21, 2011
If you allow the foreclosure then yes you will have to pay back. If you can have a short sale approval, then you will have an opportunity to negotiate the difference. With most people not owing anything, as long as you act quickly and allow enough time to negotiate. Yes you can short sale an upside down home. You can even repurchase with some restrictions. Here is a similar question on my site answered http://sicklervilleshortsalerealtor.com/2011/01/can-i-short-…
You can short sale if you have a hardship: http://sicklervilleshortsalerealtor.com/2011/01/can-i-short-…
Don;t let the bank foreclose. Find yourself a good foreclosure realtor and prepare a short sale interview. A lawyer will not hurt either but a good knowledgeable realtor will have all the info you will need.

Larry Sarlo
Weicher Realtors
0 votes
Mike Robbins, , Irving, TX
Fri Jan 21, 2011
You do not have to pay back a fha loan if you are foreclosed on. I would do everything possible to prevent a foreclosure as it will greatly effect you crddit in a negative way. I would not recommend a deed in lieu of foreclosure & suggest doing a loan modification or a short sale.
0 votes
Lyle Wolf, Agent, Morristown, NJ
Fri Jan 21, 2011
New Jersey is a deficiency judgment state, so if your home is foreclosed on you may be on the hook for the money owed for a very long time. Your best alternative if a loan modification does not work out is probably a well negotiated short sale. A deed in lieu might be almost as bad as a foreclosure for you . You need the advice and counsel of a good real estate attorney and a local real estate agent with considerable short sale experience. Please do not make the mistake of making decisions without fully understanding all the alternatives open to you and their consequences.
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