I don"t want to do anything illegal...

[StrawberrySu]

The 2005 bankruptcy law revisions set a waiting period (I think it might be two years) for you to move to another state and use the homestead exemption. This was done to deal with some high profile cases where debtors moved to a state like Florida or Texas with an unlimited homestead exemption and spent millions on a "home" to shield those millions. So you would have to be able to wait out that waiting period after buying the home, and in the meantime the creditors could sue you, and if they got a judgement, might be able to force sale of the new home.

As long as there isn't an assignment clause in the loan agreements for the rental properties, and possibly even if there is, I don't believe you're doing anything illegal by collecting the rents and not paying the mortgage. I don't know whether your state allows deficiencies on owner-occupied homes, and I understand very few people have actually been able to get through the HAFA process, but almost always a deficiency can be assessed on a commercial mortgage. If the short sale you have an offer on can be approved by the bank with the condition that the deficiency is waived you're lucky.

You might consider BK now. If the homes are underwater, with other exemptions you may be able to exempt the "things" you think of selling and some cash, but probably not $70K. But you may be able to regain some ground renting and saving. If your husband is ex-military does he have a VA mortgage eligibility? As long as the home you are letting go, if the VA isn't the mortgage holder taking the loss he might qualify for a mortgage in a couple of years from discharge.

Our former home that is now a rental (and is in the short sale process) has a VA loan. I had read that if we moved, our BK filing was based on where we had lived the majority of the last 180 days, but I midssed the part about the 2 year requirement on homestead exemptions.

[keepmine]

I'd suggest you get yourself to a bk lawyer now.
You're better off filing now as opposed to moving and then having to wait 2 years to use NC. state exemptions.
Sounds like you really have little to protect right now so go ahead and pull the trigger, get your discharge and then move.

[StrawberrySu]

Did you sign an assignment of rents with your lender on the rental property?

No, first property was a house we bought for our daughter, SIL, and four little granddaughters a few years ago. I had to buy it as an investment property, and after a year of my SIL being unemployed and us wiping out our savings to keep loan current, they moved out and we rented it ... on second renter in the first year, it's an old house, needs new furnace and roof, prolly have to evict this tenant. Other rental was our home, bought in 2005, we lease optioned it in 2009 and moved to a less expensive home. Now our lease optioner is bailing and we can't get someone to pay $1400 a month ... our l/o guy is willing to stay and pay us $900, so it isn't empty.

[Charlie777]

The 2005 bankruptcy law revisions set a waiting period (I think it might be two years) for you to move to another state and use the homestead exemption. This was done to deal with some high profile cases where debtors moved to a state like Florida or Texas with an unlimited homestead exemption and spent millions on a "home" to shield those millions. So you would have to be able to wait out that waiting period after buying the home, and in the meantime the creditors could sue you, and if they got a judgement, might be able to force sale of the new home.

As long as there isn't an assignment clause in the loan agreements for the rental properties, and possibly even if there is, I don't believe you're doing anything illegal by collecting the rents and not paying the mortgage. I don't know whether your state allows deficiencies on owner-occupied homes, and I understand very few people have actually been able to get through the HAFA process, but almost always a deficiency can be assessed on a commercial mortgage. If the short sale you have an offer on can be approved by the bank with the condition that the deficiency is waived you're lucky.

You might consider BK now. If the homes are underwater, with other exemptions you may be able to exempt the "things" you think of selling and some cash, but probably not $70K. But you may be able to regain some ground renting and saving. If your husband is ex-military does he have a VA mortgage eligibility? As long as the home you are letting go, if the VA isn't the mortgage holder taking the loss he might qualify for a mortgage in a couple of years from discharge.

[frogger]

Did you sign an assignment of rents with your lender on the rental property?

[StrawberrySu]

Husband and I have 2 rental properties underwater about 25%, currently both are rented but for less than mortgage, both just listed for short sale. Already have an accepted offer on one between us and seller (165k, owe 203k). We are broke have no cash to repair properties. Advised I need to not pay mortgages in order to qualify for short sales. Can I keep the rent to save for future?

Also seems I need to default on CC (about 15k total on 7 cards) to trigger short sales, cause mortgagers don't believe you are in trouble unless you are in trouble across the board.

Plan to go HAFA route on primary home, because it is also underwater (at least $40K), and we want to move to a warmer climate, with our grandkids, in North Carolina. Hubby has decent job, but commute is 3 hrs round trip, and is wearing on his health, job is getting too physically demanding for him as well. We have $1600 a month in military retirement as well.

So..questions:

If we sell off small items here (furniture, pool table, old car, etc), keep cash from renters, stop paying CCs, and save as much cash as possible, can we go to NC and buy a foreclosure for cash ... I mean is it legal, not is it possible..

Once all houses have worked through short sale, and if we have no deficiencies, the CCs would be the only worries as far as credit. If we end up in foreclosure, we would have to file BK next year. The rental properties should allow us to go Chap 7 without means test, right? So it's okay for my husband to get a decent job?

If we do buy a house in NC, the home exemption is a total of $70k for both of us ... so if we buy a cheap house, we can convert our saved cash into a safe place, correct?

We are 55 years old, no retirement other than SS, and his military, no savings no assets, no equity, health issues, just want to go where it is warmer, cheaper, and have less stress for the years we have left...is that so wrong?