I'm underwater, what do I do?

[Luckygir15]

What is the name of your state (only U.S. law)? MA

I bought my condo for 95k in 2007 with 0 down. Similar condos in my complex are now listed for 75k are going from 50k-75k. (My condo has been completly remodeled with new kitchen and bath which these have not)

I just got married and want to buy a house someday. We're going to move into my inlaws to save up and see these as options:

1. Rent the condo for a few years till the market hopefully picks up. Buy new house in a year using my husbands name only.
2. Try to sell the condo for 95k even though we know no one will even stop in, and also rent it out at the same time.
3. Try to refinance? Im not sure they will even think about it.
4. Do a short sell and ruin my credit? Again, not sure if I can do this?
5. Sell my condo for 75k and take out a personal loan for 20k to pay the bank the difference???

Please help! Whats the best option???!!! Im soo overwhelmed!What is the name of your state (only U.S. law)?

 

[FlyingRon]

This isn't really a legal question.

#1 is workable. It's quite likely they're going to look at both your credit as a married couple even if you're trying to keep it in his name alone. They know that nothing prevents him from deeding the property to you as soon as things close anyhow.

#2. This is just #1 with an exit strategy.

#3. You are right, this will be hard and doesn't do anything to get you to the goal of owning another home anyhow.

#4. A short sale won't ruin your credit, but you probably won't be considered for one until you default and hence your credit will be ruined. Further, these days the bank still requires you to accept responsibility for the deficiency even if they do release the security on the property.

#5. This along with #1 are the responsible ways to do it.

 

[Mass_Shyster]

4. Do a short sell and ruin my credit? Again, not sure if I can do this?

Other options (that will ruin your credit as well) include

• walking away and allowing the condo to go into foreclosure. The bank may still come after you for the deficiency.
• Not walking away, but stopping your mortgage payments. The condo goes into foreclosure, but you end up staying there for the year or so before the foreclosure goes through and you get evicted.
• Filing bankruptcy. This can be done in conjunction with either of the above.

 

[Luckygir15]

So which one would you do? Which options is best?

 

[Zigner]

The OBVIOUS option is to continue to fulfill your obligations that you willingly took on a very short time ago. Your situation is only one of changing your mind. You, apparently, still have the full ability to pay, as agreed. Why should you even consider screwing the lender out of what they are due?

 

[Luckygir15]

The OBVIOUS option is to continue to fulfill your obligations that you willingly took on a very short time ago. Your situation is only one of changing your mind. You, apparently, still have the full ability to pay, as agreed. Why should you even consider screwing the lender out of what they are due?

I have no intent on giving my lender the shaft as me and my husband have near flawless credit and would like to keep it that way. I think based upon some of these comments what we are going to do is List the property for some happy medium between what I owe and what they are listing for while at the same time renting the condo. If we are to receive a reasonable offer I think we would go the route of a personal loan to pay the balance off to the bank and be done with it. Given how the state of MA handles housing related issues I would prefer to avoid renting entirely. Thanks for the great responses!

 

[Zigner]

Why can't you just stay in the unit and save up money?

 

[Antigone*]

Why can't you just stay in the unit and save up money?

A deficiency of $20M is not all that much. I have the same question as Zigner.

 

[tranquility]

The OP wants to move in with inlaws to save money and rent the condo to pay the loan.

As long as the OP intends to pay off the loan, I don't see any problem with that. If a default were in the future, I would question the changing of a residence into a business, but that seems not the case here.

 

[Luckygir15]

Why can't you just stay in the unit and save up money?

We would save a TON of money living with my inlaws and be able to bank that money for a downpayment on a house. My husband really wants a house with a garage and the ability to make whatever changes we want without asking a board for permission.

If we continue to live in the condo, it would take at least 3-4 year to save the same amount of money.

 

[wavehopper27]

Do you have an FHA Fannie Mae or Freddie Mac home loan. If so, perhaps one of the goverment home loan modifications may be of use.

I have a house that I paid $326,500 for back in 2008. Today, It's worth only $285,000. Thanks to an FHA streamlined refinance, I am able to refinace my home from a 6.5% to a 3.75% 30yr fixed saving nearly $700 per month in the process and no appraisal.

Just an idea.

 

[Gail in Georgia]

"We would save a TON of money living with my inlaws and be able to bank that money for a downpayment on a house."

Just an aside...moving in with new inlaws may bring a whole set of headaches that you can't even begin to realize. That condo may look good after a few months of this.

Gail

 

[wavehopper27]

"We would save a TON of money living with my inlaws and be able to bank that money for a downpayment on a house."

Just an aside...moving in with new inlaws may bring a whole set of headaches that you can't even begin to realize. That condo may look good after a few months of this.

Gail

I would definitely heed this advice if I were you.