Thinking about -gulp- surrendering our home

[Tom_Mi]

Hi all,
We're trying to make tough decisions to do this right. I had a real estate business fail - 2 apt buildings went backward and now I'm in the hole 100k+. Other than that, we only have about 8k in cc debt.

Our home is a problem tho. It would sell today for maybe 220k. I owe 240k + 39k 2nd. Tot 279k. By the numbers I think we're better off walking, but man...we built this right next to grandpa/grandma...utopia for the kids. This might be smart but it is going to HURT .

But let's say I dump it, rent 2yrs and buy something older and cheap. Like I should have 8yrs ago.

-Would a guy offering a rent/land contract see my business loss at face value and let me get a LC (and get some equity) for those 2yrs? ...or am I dreaming?


Did I mention walking away from our home stinks?

[BK2008]

Are you planning on filing BK??? Have you talked to an attorney yet?

If you are having problems making the payments, you'd be wise to walk away, and include that debt in your BK, also.

I couldn't tell you if you'd get a line of credit or not, it depends on the lender or the holder of the rent/land contractor.

Yes, it does stink to lose your home.

[Tom_Mi]

Thanks, I've had several meetings with an atty, and Mon we're going to meet and file. I'm pretty confident we can get a CH7. Our home loan is up-to-date. I'm only late on the apt buildings.

I know we can keep the house, but I doubt it's smart to, when the CH7 offers us a way to walk. In our situation though, walking will be especially hard. My wife's parents are our neighbors. We'll come to visit them every week or so, and we'll have to LOOK at this house - and the memories of our young children playing in this yard - for years.

A Land Contract might give us a way to get some equity during the 2yr "mortgage blackout"... so I'm kinda wondering if a seller would look at my situation less negatively than if I were discharging a ton of consumer debt.

[fltoo]

I am all for surrendering upside down houses, have done it myself, but.....

I have also reared kids by myself and I would have done anything to have a built in network for the kid's security.

You use the word "utopia" so I can see that you feel having the kids next to their grandparents is a good thing.

IF you do not live in a state with severe housing inflation, FL, NV, etc. and IF you can afford the house payment, I would stay put.

Your house is not that much upside down that it will not recover and your cc debt is not that bad. Have you thought about bk'ing the business debt only?

Look ten years into the future. Even if you are just even on the house in ten years, were your children better off living next to grandparents? If you answer yes, the choice is obvious.

[PoorGrammyinBK7]

I agree with fltoo - if you can afford the payments, the market will probably recover. You could try the "debtor will retain collateral and continue making payments" invisible option and maybe it will all work out and you could even refinance later down the road.

I think it is wonderful when kids have the benefit of grandparents nearby.

Priceless.

[Tom_Mi]

Thanks FLtoo.

Another (of the many) option would be to go CH13 and dump the 2nd on the house, making it LESS upside-down. Actually I could do this on one of my 3 apts and it would become viable too. (but the other bldgs are hopeless and MUST go).


My wife and I are probably going to choose between:

-keeping the house under 13 (above) and enduring the pain of the payment
plan - no savings, no 401k contributions.

-or ch7 and dumping it all - but rebuilding on intelligent footing.

[BassBoy]

I would have to agree with fltoo. If you're able to keep up the mortgage payments, then I say keep your home.

I feel that your negative equity may even out in a few years as the housing market rebounds (if it ever does) while you're paying down the principle each month.

[AngelinaCatHub]

Check what rent will cost you. As a realtor you should know the value is location, location, location. You are happy with the house. You could ride through it and not reaffirm. If you can't afford it, then I agree with fltoo. There is more to life than money. That house has more value to you than what the object is worth.

Everything has three values. I love to tell stories so let me demonstrate: You have an old gun. What is it's value. The intrisic value is what the gun is and worth on the market. BUT, the gun was used in Custer's Last Stand. Now the gun's value goes up. Then you have a picture and documentation that Custer owned it. Then the gun is revalued as priceless.

Your house is priceless to you. Keep it if you can.

[JRScott]

With the house so upside down your better off walking away and not reaffirming, however make sure the court will allow you to count the expense on your paperwork. Otherwise just don't ever sign the reaffirm paper and walk away after the bk .

[deafbroke]

With the house so upside down your better off walking away and not reaffirming, however make sure the court will allow you to count the expense on your paperwork. Otherwise just don't ever sign the reaffirm paper and walk away after the bk .

This is the best option. Gives you time to find another home too. Surrendering you will have to be out sooner. Just do a ridethrough and don't sign reaffirmation. Also stop paying the mortgage payments. I'm discharged, did a ridethrough on our hobby farm,, havent made a house payment since feburary, and just recieved letter from mortgage company that they are starting foreclosure process. I've been renting a house for two months. I didn't reaffirm so I'm not liable for anything from foreclosure.
Best route to take.

DB

[HHM]

Do not reaffirm the house.

Whether you should walk away is a different issue. You are about 20% negative, that is a lot of negative equity to try to dig out. The real estate market is not recovering any time soon. Whether you should stay depends on your over all goal. If you "realistically" see your self in that same house 15 years from now, stay. If not, you are better off walking away, renting, and saving for a more permanent house.

[stre$$edout]

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[bmrigs]

walk away from debt completely and into freedom. Homeownership is a misnomer and a scam.

[Joe Farmer]

Your house will never recover that lost value.

Gas prices, raising prices on everything else, insurance premiums ready to escalate, unemployment, a crashing airline and auto industrial base- how can logical folks believe that all of that will turn around, much rebound? The world is changing badly and rapidly...

[Joe Farmer]

My own example:

I refi'd out of a variable, just a year ago. Then the market crashed. Now I have lost suddenly maybe $70,000, and there are TWO HOAs here, both of which increased their monthly dues, and one which has a mere $7000 in the bank!!!, YET decided to spend $300 planting flowers!!!, even while adding a special assessment to EVERY homeowner for $300 each to repair the pool!!!? And my property tax is now increased based on the prior two years inflated assessments from the county, and the electricity was raised 11%, and the water was raised 8%, AND my homeowner's insurance was increased- how can logical people say that this trend will ever be reversed? It's going back to the way it was long ago- a few will own everything, and everyone else will again be renters.