I want to foreclose on my condo but I am not sure if it is my best option. I am almost $40,000 in the hole, my HOA's are now a whooping $380

Asked by Mcollins2947, Denver, CO Tue Aug 9, 2011

with talk of them going up. They have already told us the $380 is in place for at least 4 years. My boyfriend is out of work so we are on my one income which isn't lousy but it just isn't enough. (I am the only one on the mortgage). At this point, I would rather rent a $600 apartment for the time being and not have to worry about what to give up next. What can happen if I stop paying my HOA's and mortgage? Can they garnish my wages? I can't get good answers from anyone. Mostly, this is due to my HOA's being over 65% of my mortgage and they keep going. I will never sell considering I am $40000 in the hole and i need out of there. By the way, have talked to my mortgage company and they just keep telling me I need to have a "hardship" and if not, I won't get away with it.

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Web reference:


Alex Lopez, , South Florida, FL
Thu Dec 8, 2011
There is no reason to let the bank foreclose, you can perform a short sale which will eliminate the mortgage and avoid foreclosure, learn more about the short sale process at: http://www.shortsalespeople.com
1 vote
Chris Willia…, Agent, Henderson, NV
Tue Dec 6, 2011
I agree with many other agents that answered your question, a shortsale would be your best option. It sounds like you have enough of a hardship to qualify. Shortsales are common now and you can even qualify to buy at todays lower market prices one year after a shortsale. Even if you have a local agent try to list your home as a shortsale and it doesn't go through, forclosure is not the end of the world. Everyone is underwater in their mortgage and needs to escape. Find a REALTOR with a good track record for processing shortsales in Denver and also cosult a Real Estate lawyer if you're usure what decision is best for you!

Chris Williams
1 vote
Brooke Hengst, Agent, Centennial, CO
Wed Nov 30, 2011
If you truly have a financial hardship, then I would definitely speak with someone about a short sale. If you are just wanting to get out of it and foreclose on it then I would make you sure you are aware of the ramifications on your credit and future purchasing power.

Good luck with this and let me know if there is anything that I can do to help!

Brooke Hengst
REALTOR, CDPE, The Elite Team
Your Castle Real Estate
(720) 988-5952
Web Reference:  http://www.brookehengst.com
1 vote
Robert McGui…, Agent, Denver, CO
Tue Aug 9, 2011

The first step is to call the Colorado Foreclosure Hotline - 1- 877- 601- HOPE. they will spend time with you and give you some free advice as to your options at this time. If they suggest a short sale there are real estate professionals and Short Sale Coordinators that know how to get the ball rolling. The bank is not going to help or advise you since they do not have your best interests at heart. I would suggest you keep making your payments in the mean time and especially the HOA. Under certain circumstances, they can go after you for any remaining balances even after after you have settled with the bank. Again, call the hotline, it is free and you will walk away with some valid options.

Robert McGuire
1 vote
Phil Lunnon, Agent, Lakewood, CO
Tue Aug 9, 2011
You need to call the Colorado Foreclosure Hotline -- 1- 877- 601- HOPE. I have also provided a link to their web site. It is a free service set up to help people in your situation. If you don't like what they have to say, you should speak with a lawyer.

Good luck!
1 vote
Irina Karan, Agent, Aventura, FL
Fri Apr 20, 2012
The way you describe it you do have a hardship.

Your mortgage company is correct - you have to have a hardship to do anything, as well as to be "under water" value-wise. There are many options available to you - some better and some worse. Short sales (there is a HAFA and regular one) are the best option in most cases - you can go on renting as you wish, after selling your property at the price lower than your mortgage, and your bank agreeing to it and forgiving (waiving) your deficiency. You will be able to buy another property in about 3 years, and the damage to your credit history is minimal (and it's not a foreclosure, which is the worst option - because if you have "mortgage deficiency" - the bank can potentially garnish wages).

To know if you have a hardship (and your boyfriend is not part of this, as he is not on the note or mortgage) - you take your assets, subtract your debt, and if you are in the read - you are considered to be insolvent or "broke", and that gives you some tax advantages (exceptions). You also have to be in the read after your monthly expenses (and your expenses have to be modest - because the bank is looking to see where you spend money, because they want to see a true hardship).

Of course, foreclosure hotline is a great thing, and visiting attorneys for a free consult would be very useful, and, if possible, seeing a CPA would help to plan your tax protection (you have to get that "deficiency waver" from your bank - and be insolvent - but CPA will tell you more on this).

I suggest to interview a couple of CDPE (Certified Distressed Property Expert) designated realtors in your area - you can find them on http://www.CDPE.com site.

Best of luck,

Irina Karan
Beachfront Realty, Inc.
CDPE - Certified Distressed Property Expert
0 votes
Eric Moore, Agent, Columbia, SC
Tue Dec 20, 2011
Try to short sale the condo. Try to negotiate a shortsale with your lender ,and avoid foreclosure if possible.
Web Reference:  http://www.ericmoore.info
0 votes
Robert McGui…, Agent, Denver, CO
Thu Dec 8, 2011
McCollins 2947,

You don't always have to pay the deficiency. It depends on how well the short sale is negotiated with your bank. A good result of a short sale for a resident (not an investor) should include a signed letter stating you will not receive any proceeds and that the bank won't come after you for the deficiency. If don't get this agreement, you don't have to sign it and do the short sale. Since you can stay at the home until the short sale is complete, you have nothing to lose by trying. The last resort would be letting them foreclose and possibly filing bankruptcy. Again you should a good realtor or real estate attorney to make sure what your ultimate results will be.

Robert McGuire ASR
Your Castle Real Estate
1776 S. Jackson St. #412
Denver CO 80210
0 votes
Margaret Has…, Agent, Tampa, FL
Thu Dec 8, 2011
If you short sale you condo, your Realtor (or the one facilitating your short sale) can ask the lender to waive their deficiency rights. If they waive their deficiency rights, they forgive your mortgage. But since you can't get good answers on the web, I would suggest contacting a Realtor or lawyer for some good advice.
Web Reference:  http://tampahouse1.com
0 votes
Mcollins2947, Home Owner, Denver, CO
Thu Dec 8, 2011
Everyone still thinks a short sale even after my bankruptcy and my house being able to be included in it if I foreclose? And if I short sale, I still have to pay my mortgage right?

I am not worried about buying in the near future. Because of the bankruptcy, I won't be able to buy for a while anyways.
0 votes
Shawn Ryan R…, Agent, Belleville, NJ
Thu Dec 8, 2011
avoid foreclosure at all costs. pursue a short-sale. Some SS programs will even pay you a few thousands dollars for completing the process instead of being foreclosed
0 votes
Shawn Ryan R…, Agent, Belleville, NJ
Thu Dec 8, 2011
Wages cannot be garnished by a HOA or even a mortgage company. Only criminal/civil issues like child support are grounds for garnishing wages.
0 votes
Joseph Jasmi…, Agent, Plantsville, CT
Wed Dec 7, 2011
A short sale would be an option to consider. It will not stay on your credit report as long as a foreclosure. Most lenders would prefer a short sale as oppposed to foreclosing on a property.
0 votes
Mcollins2947, Home Owner, Denver, CO
Tue Dec 6, 2011
Hello! Well, I have not made a decision yet. Basically, I just want out. I am in over my head, I can't even rent it for what I need to pay the mortgage and the HOA's. About 3 years ago, I filed bankruptcy at which point I was given the option to keep my home. I did keep my home. So, when speaking to the lawyer again, I was told that I can go ahead and stop paying and that the house will go under my bankruptcy since I was in possession of it during that time (just like if I had a car payment, I could do the same thing). I live paycheck to paycheck for a 1 bedroom, 1 bath condo which I am being told will take years to reach value. Bad neighbors, bad management company. My lawyer has also told me to continue paying my HOA's as they CAN garnish my wages and file suit. So, right now, my lawyer is telling me to stop paying the mortgage part of things and save the money. Only thing is, I have no savings and I will need to be able to stay there for several months without paying so I have enough for deposits to rent and things. From what I have been told. renters can no longer turn you down for bankruptcies or foreclosures... Only evictions. Not sure how true that is. I am really torn on this one. Still sitting on the fence. I can make it for now, living paycheck to paycheck but if they raise the rates again, I won't be able to do it anymore and if I wait and they raise the rates, it will be hard enough to sell with rates well over $400 for what you get and for what I owe on top of it, I might not have the bankruptcy option anymore.. But right now, I have a lawyer and I think I might have an out. I am more worried about the amount of time it will take them to foreclose on me. My lawyer thinks it will be at least 3 months before they even consider doing a loan modification since they won't even talk to me right now about doing such a thing until I am delinquent. He also told me I will not qualify for a loan modification, but it will buy me time.

It is SUCH a scary decision and right now, I don't really know what I am going to do. I love my place (not the neighbors, poor management, poor maintenance) but it is eating me alive. I could be in a 3 bedroom house right now for what I am paying.

I have talked to other residences and they are not happy about the rates but about 80% of the condos in my place are owned by 60+ year old's who bought their places for $20,000, $30,000 and only have $300 mortgage payments to begin with. The one's who are in my situation are foreclosing and most of the older people are renting their places out for $600-$700 a month and leaving. I would need at least $1100 a month and that would be me covering $100 of the HOA dues. I also do know of 2 people that the HOA's are foreclosing on for non payment. There is a lot of talk around there but not a thing we can do. We have looked into it and everything the HOA are doing is supposedly legit and they have a great lawyer backing them.

I worry about this daily and am not sure what my decision is going to be. Regretting ever buying in the 1st place, now.
0 votes
John Walin, Agent, Libertyville, IL
Tue Dec 6, 2011
To the bank, your boyfriend being unemployed is irrelevant. Do you have assets and would you qualify for the mortgage you have now? Your debt to asset picture, stable earnings and credit worthiness would determine if the bank will forgive the 40k projected shortfall at closing. Whats with so many agents auto default to short sale? Sounds like you don't have a hardship. Loss of job, death of spouse or divorce, or huge medical bills qualify as hardship. HOA going up and you being upside down 40k doesnt automatically qualify you for short sale. Bank might go along with short sale, thats called the release, but the hard part is the satisfaction letter saying you are paid in full. Bank might be OK with getting 20k of the 40k, thats where you having an attorney negotiate the defiiciency amount downward assuming the bank says you do not show adequate hardship.
Renting can be tough too, your credit will be destroyed for 18 months minimum and any landlord will run a credit check on you and unlikely to find a place to rent. Thing to do is rent a place now to live in before you have the bad credit and try to rent your condo. Get legal advice on bankruptcy chapters and negotiate the best deal you can get from the bank. Watch out for agents that claim to be "short sale experts", while one can specialize in short sales, that does not make one a legal expert. Err thats called practicing law not real estate! Any responsible agent will have you sign a disclosure that you might owe money to the bank and you are still on the hook for a commission.
0 votes
My NC Homes…, Agent, Chapel Hill, NC
Tue Dec 6, 2011
In my opinion you need to immediately do three things. First, stop wasting your time online, you need to sit down with a real estate attorney this week to explore your options. Secondly, Go into your bank (unless your lender isn't local in which case you need to get a hold of someone and get their name, title and direct phone number) and tell them you demand they refinance you at current rates or you will be filing a complaint with the Colorado State Attorney General's office. Finally contact the State Attorney Generals office and let them know what's going on both with your lender and with your HOA.

You don't get to foreclose. Foreclosure is a legal action taken by the lender or state to collect money. In some states an HOA can foreclose on a property, I do not know if this is the case in Colorado.

You can possibly consider bankruptcy, however there are serious legal and credit ramifications to doing this and you don't want to do so without a full understanding of what you're doing. This should be part of your conversation with the attorney.

You are not the only owner who must be concerned about the HOA fees, you need to start contacting other owners and discussing the fees. How do you know you are getting what your paying for. HOA's should be audited every year by an outside accountant. Perhaps you and other owners need to challenge the fees. As an owner you are entitled to a vote, if you don't pay attention to your HOA, this is what happens.

Do not waste anymore time on line. Go meet with an attorney.
0 votes
Mildred Vale…, Agent, Bronx, NY
Mon Dec 5, 2011
Have you looked at an option for a SHORT SALE?

This will allow you to sell for less than what you owe the bank. By going the short sale route you can salvage your credit and purchase another home in 3 years. Speak to an experienced agent in your area today!

Best of Luck!

Millie Valentin
RE.MAX Voyage
Web Reference:  http://www.voyagehomes.com
0 votes
Jeffrey Kami…, Agent, La Grange, IL
Sun Dec 4, 2011
It sounds like a short sale is your best option. Find a local Realtor who is experienced in short sales. It is very important to find out if your lender will pursue a deficiency judgement in case the property sells for less than you owe. If you are concerned about the HOA pursuing unpaid assessments, I would recommend consulting an attorney. Don't get discouraged! There are thousands of Americans in similar situations to yourself due to this market.
0 votes
Barbahrooba, Home Buyer, Orlando, FL
Sat Dec 3, 2011
Hi Diane,

Regarding your housing question, here is how we did it. Last fall was used to search the web extensively for prospects and Property managers. One of the reviews that came up was from travelexplosion.com

We went to each homepage of the agencies mentioned and picked three that we would like to check out further. I suggest anyone looking for a property manager do the same. What we felt was right for us may not be right for you.
Then last Christmas we spent 3 weeks visiting communities and homes in the area and ended up with Compass Bay on top. Then we asked a representative from the agency to view a model home with us. His first question was: is the pool heated? The sales representative was a little stunned by the question, because as it turned out, no pool heaters were installed. I did not even think of asking that question, because I took it for granted. He explained to us that every renter will expect a heated pool in the wintertime, and that this is a must as far as rental is concerned. His summary at that point:
• Excellent location for renting
• Pool heaters must be installed
• Overpriced (they were asking almost $250k + closing cost for a 1797 at that point)

We told them no interest from us before there are heaters installed. Then after a few months we got word that the heaters were in place, and after some more time monitoring the prices and seeing one house after the other go, we made an offer lower than suggested price and it got accepted. Then another 3 weeks over in May to pick the options at KB home studio and a meeting with the Property manager to sort out some questions. Again over for the walk thru and closing in September.
We are fairly confident that we have some control, we got the HOA deed of restrictions up front and discussed them with our Property manager, got insurance quotes, prices on electricity, water and what not, so hopefully there will be no big surprises.

0 votes
Diane B Kapl…, Agent, Monmouth Beach, NJ
Sat Dec 3, 2011
A short sale would be the best way to go. Contact your mortgage company and tell them that you are putting the condo on the market for sale - but, first get two or three market evaluations to see just where the pricing is at this time. As long as you keep the communication open with your mortgage company they should work with you. Once you get an approved buyer contract that the bank agrees to, then you can move out. If the bank agrees on the short sale there is no foreclosure. The HOA cannot garnish your wages, they can place a lien on the property for the money owed, but the bank should take care of these fees since they do not want to have liens on properties.
0 votes
Sally English, Agent, Atlanta, GA
Sat Dec 3, 2011
What did you decide to do?
0 votes
Jane Eid, Agent, East Brunswick, NJ
Sat Dec 3, 2011
You have a couple of options, a deed in lue if you only have one mortgage. You defenitely have a hardship there. It doesn't matter if you are working or not you can qualify for a short sale which it will be your better option. The HOA's dues can become a lien to your property, if that happes, they are paid when the short sale is completed. Please call me with any other questions you may have.
Jane Eid
0 votes
Donna Zalter, Agent, Aventura, FL
Sat Dec 3, 2011
Stick with it. $40,000 in the hole is less than if you had to move and close on a new house. Plus the effect that it would have on your credit...
0 votes
Akhila Aneja, Agent, Metuchen, NJ
Fri Dec 2, 2011
Short sales are only applicable if you are going thru Hardship.
Since you are working---It does not apply for you.
You should add yr monthly expenses and see where you stand against yr Income.
If you are going in debts, you shld consult yr Mortgage for Loan modification.
They will work with you and you can Hang in there and things will turn better.
Good Luck!!
0 votes
Marco Gomez &…, Agent, Jackson Heights, NY
Fri Dec 2, 2011
What you should do is look at the short sale option, which will allow you to sell for less than what you owe the bank. By going the short sale route you can salvage your credit and purchase another home in 3 years.

Marco Gomez
NYS Associate Broker
Keller Williams Landmark II
Serving Queens, Nassau and Brooklyn
0 votes
Renata Kolia…, Agent, Gilbert, AZ
Thu Dec 1, 2011
Hi Mcollins2947,
I just got on this webside and saw your question and a lot of answers. I would like to know what you dicided to do and were you are with your condos situation?
0 votes
Horace Bryan, Agent, Charlotte, NC
Thu Dec 1, 2011
I don't think you will qualify for a "hardship" simply because your boyfriend is out of work as he is not on the mortgage. You should definitely speak with the bank to see if they can restructure the mortgage if there is any other hardship you qualify for.
0 votes
Scott Godzyk, Agent, Manchester, NH
Thu Dec 1, 2011
If your boyfriend is out of work, that could be a harship, if you can not make your payments, that is a hardship. if you are making your payments and just want out becuase you owe 40k mor ethan it is worth, that is not a hardship. Meet with a local and trusted agent who is well expereinced short sales that can guide you. good luck


Please see my blog for how a short sale works with some tips and advice for home owners
Web Reference:  http://www.ScottSellsNH.com
0 votes
Akhila Aneja, Agent, Metuchen, NJ
Tue Nov 29, 2011
I think that you should consider short sale before deciding on foreclosure. talk to an expert lawyer or a real estate agent for more advise.

0 votes
Ron Rovtar, Agent, Boulder, CO
Sun Aug 14, 2011
Hi Mcollins2947:

Sounds like you are in a tough situation.

I see that some answers below recommend the Colorado Foreclosure Hotline - 1- 877- 601- HOPE . Good advice.

If that does not work for you, the U.S. Department of Housing and Urban Development keeps a list of Approved Housing Counseling Agencies. These are free services where the workers have a lot of information about programs to help solve issues like yours. For Colorado, the link is : http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction…

There is a lot of good help out there for people in your situation and you can find the best options if you use these services. However, stay away from any unapproved service that sounds at all suspicious. If it sound that way, it probably is.

Kind regards,
Ron Rovtar
Prudential Real Estate of the Rockies
Days: 303.981.1617
Evenings: 303.473.1926
0 votes
Suz A, Agent, Longmont, CO
Tue Aug 9, 2011
Hello Mcollins2947:
That is a difficult situation you describe. And, this is a lousy time to be out of work.

Consider if you become delinquent on your HOA dues:
1) Some HOAs are using collection agencies to recover unpaid dues and they will pursue their money
2) Your credit becomes tarnished
3) Some HOAs have been filing suit

Your options:
1) Offer your place for rent (if that is allowed). Make sure the rent you can charge will cover your mortgage and a bit more for setting aside in case you can't rent it for a few months or something needs repair.
2) Talk to the HOA about a reduced payment until your boyfriend is paying his share again.
3) Refinance
4) Short sale
5) Sit down with your budget and see if you can't endure some austerity until conditions improve

The best thing you can do is what you did here. Communicate with people and see if you can't improve your situation. If you have noticed that there have been a number of foreclosures in your HOA, your HOA might be having to absorb a number of delinquencies. Approach them in a professional manner and see if they haven't already considered a program that would work for you.

And good luck.

PML of Longmont, CO
0 votes
Ethan Besser, Agent, Englewood, CO
Tue Aug 9, 2011
Dear Mcollins2947,

It sounds to me like you might have a hardship. If so, you should qualify for a short sale. I have over a 95% success rate getting short sales approved. I am a Certified Distressed Property Expert. Call me as I can help you.

Ethan Besser, CDPE
Certified Distressed Property Expert
Broker Associate
Keller Williams - DTC
Cell: 303.856.8980
Fax: 303.539.4809
0 votes
Eli Givoni-S…, , Boca Raton, FL
Tue Aug 9, 2011
You can short sale this property and keep foreclosure off your credit. We will try to negotiate you off the hook for the $40K deficiency. Feel free to give me a call and I can explain the process to you.

Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states

MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
0 votes
MODUS Real E…, Agent, Denver, CO
Tue Aug 9, 2011
You might want to check the rental market before you start falling behind on payments and give your place back to the bank. The vacancy rate in Denver right now is close to 1% which means rents are on the rise and a good rental unit goes fast. You might find it is cheaper to stay put and keeping paying than throw yourself in the rental market. Don't forget about the tax benefits of being a homeowner as well. Best of luck with whatever route you go down.
0 votes
Merritt Noel, , Denver, CO
Tue Aug 9, 2011
Given your situation I would try to attempt a short sale in order to save your credit. However, unfortunately for you condo financing is not the easiest these days. I would suggest contacting a realtor that specializes in short sales. I would be happy to refer someone if you need.

To reiterate what Michelle said you will still have HOA dues that are owed even after a foreclosure. They can and will come after you. The foreclosure avenue is best to be discussed with a real estate attorne.

Good luck to you whatever you decide.

Merritt Noel
Sr. Loan Advisor
American Liberty Mortgage
Web Reference:  http://www.merrittnoel.com
0 votes
Ray, , Denver, CO
Tue Aug 9, 2011
Call HOPE NOW: 1.888.995.4673

They are a pure non-profit housing agency that won't charge you and will connect you to a housing counselor for free.

Ray Williams
Branch Manager
Summit Home Mortgage
Web Reference:  http://www.fhacolorado.org
0 votes
Rachelle M P…, Agent, Denver, CO
Tue Aug 9, 2011
If you have a way to re-finance or catch up what your behind you could consider a rental or lease/purchase. This could save your credit and allow you to hold until the market comes back. This can be done quickly and allow you to stop struggling without giving up.. Call me if I can be of assistance
To Your Great Success!
Rachelle Paplow
Broker Associate
Cherry Creek Properties
(720) 839-2659
0 votes
Sam Barnes, Agent, Westminster, CO
Tue Aug 9, 2011
Letting the property go into foreclosure is an option, but may not be your best option. From what you've described it sounds like you would be an ideal candidate for a short sale. Short sales are a process where you (or me and my team) negotiate with the bank on your behalf to get them to allow us to sell your home for less than the amount owed. I specialize in these types of transactions and have a long list of references who can confirm that the short sale was the best thing to happen out of the bad situation they found themselves in.

I would be happy to talk with you and give you all of the details on how the process works and answer any questions you may have and see if this is the right solution for you.

You can reach me at 720-296-5262
0 votes
The Goetz Gr…, Agent, Englewood, CO
Tue Aug 9, 2011
And I am serious about Rox, she is the absolute best.
0 votes
The Goetz Gr…, Agent, Englewood, CO
Tue Aug 9, 2011
This is who you have to talk to, she knows everything there is to know about distressed properties.

Roxane Webster
0 votes
Michelle Hall, Agent, Westminster, CO
Tue Aug 9, 2011
Hi Mcollins,
Have you considered a short sale for your condo? It's very common now and in many instances the best option for a lot of people. Especially with your financial circumstances. I am happy to talk to you abut short selling as I have had 8 years experience in them.
As for your HOA dues, most people find that if they don't keep paying those dues until either the short sale is done or foreclosure is finished, the HOA can come after you for those payments and court costs. That is a very important matter to get good advise on from many people before stopping payments. I can give you a list of people to call who can advise you on that matter if you wish.
Call text or email me anytime and we can discuss all these matters.
Michelle Hall
Co Real Estate Group
Cell: 720-394-4620
0 votes
Derrek Patri…, Agent, Greenwood Village, CO
Tue Aug 9, 2011
Short selling may be a better option for you. Contact me and we can discuss your situation.

Derrek S. Patrick
Web Reference:  http://www.derrekpatrick.com
0 votes
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