Bought house in '06 w VA loan in Oregon $270K--now worth $170K. Can we strategically default? Or short sale? Can the feds garnish wages?

Asked by Jh, Salem, OR Mon May 16, 2011

Love our beautiful historic home in Woodburn, but we are so upside down. We could rent a home similar to ours for half what we are paying now. Husband is an officer in the military and we may be moving out of state for a new job this summer. Already did research and found out we'd only get half our monthly mortgage payment if we rented out our house. What are our options? We have friends that were deployed from Virginia to Oregon a year ago and they had to take out a $70,000 loan to pay for the difference after a short sale! We are even more upside down if you include the $40K we have put in as improvements (windows, doors, bathrooms, kitchen, flooring, hepa air system, etc). Does it help that we are in Oregon--a non recourse state? Or does that not matter since we have a VA loan? Any advice would be appreciated.

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Matt Mahoney, Agent, Salem, OR
Mon May 16, 2011
I'd be happy to chat with you about this if you would like. A va short sale is very similar to a FHA short sale and there is no recourse in our state. We would basically put together a short sale package and submit it to your lender for a preapproved short price. Since we are a non-deficiency state, you would have no financial obligation to your lender. Your credit would take a hit, but most people can recover within a couple of years. You qualify for a hardship since you are moving. Please feel free to give me a call.

Matt Mahoney
Home Star Brokers, broker cdpe
503-428-3084
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