Cleanest way to get out?

[foolishbuyer]

What is the name of your state? Nevada

I purchased a crack house during the boom for 200k
Got my first home an 80/20, both loans sold a few times, the 80% (160k$) is an arm the 20% (40k) is fixed @9%

I do not want to stay in the house, I do not plan to buy another house as I did not enjoy the "fixing" of everything that was broken, I plan to just rent for the next 5+ years

Put new windows + roof + kitchen + lots of other work into the crack house so it is now an OK house made in the 1940's.....

3 months late on payments now, wife lost job and first baby on the way, payments are 1800$/month


Have been trying to short sale @ 199 to 175 to 159 have had about 10 showings

Received intent of foreclosure

I called around and only person that would talk to me said to give the 2nd mortgage people the deed, they would sell it and pay the 1st mortgage and I would most likely not be pursued

Other alternative was to be foreclosed on, the 1st mortgage would sell house and not pay 2nd mortgage people, 2nd mortgage people would come after me for 40k$

What should I do to extend the foreclosure?
Short sale my best option?
Giving deed to 2nd mortgage sounds odd to me, would this work? should I pursue this immediately?

Is there anything else I can do? My credit is already destroyed and I do not plan to get a car loan or house loan, I just want to get out and not owe anyone any money

I have a tiny 401k and no liquid assets over 5k$
I sold one of my cars and have some cash and could pay almost 2 months.... should I in hopes of extended foreclosure? or would that be throwing the money away?
I need this cash to get into a rental (1st month + last month + deposit)

[FlyingRon]

You can't do a short sale unless both lenders agree.
I have no clue what you mean by "giving a deed to the 2nd."

Yes the two lenders can sue you for the deficiency.

Unless you have a way to "cure" the default, you're not going to "delay" the foreclosure and I'm not even sure why you would want to.

How aggressively the lenders try to collect on the deficiency against someone with no assets is uncertain. You better go make that security deposit before they get to your bank account however (if you can find anybody willing to rent to you).

[Andy0192]

You say you don't wish to live in the house, but instead plan to rent for the next 5 years...

Why not consider getting back on the good side of the lender, moving into the house and living there instead of renting, paying the mortgage for the next 2-3 years while the market hopefully recovers, and then try getting out ?

You could save your credit, and possibly build some equity. The extra $800 or $1000 you'd be paying each month as compared to a rental would end up being @ $24K over 2 years, which sounds like less $$ than you'd be hit with if you allow the foreclosure to go through.

Just a suggestion.

[foolishbuyer]

Originally Posted by Andy0192

You say you don't wish to live in the house, but instead plan to rent for the next 5 years...

I mean I dont want to be in the house (it is my current residence) I would rather rent an apartment

Why not consider getting back on the good side of the lender, moving into the house and living there instead of renting, paying the mortgage for the next 2-3 years while the market hopefully recovers, and then try getting out ?

I don't see the house being 200k for another 15 years, if I were to stay in the house there are some issues I would have some major changes to feel comfortable, adding a 2nd bathroom, grounding all the electrical, removing a couple walls to make a master bedroom...
The house is a monstrous source of stress and frustration to me, even if I was only paying 1k$/month for it I would not be happy here.

You could save your credit, and possibly build some equity. The extra $800 or $1000 you'd be paying each month as compared to a rental would end up being @ $24K over 2 years, which sounds like less $$ than you'd be hit with if you allow the foreclosure to go through.

Just a suggestion.

This is very valid, looking at it for my credit and finance it would be best to scrape by and endure. However I dont want to use credit again, I should be able to have a happy existence on just my income if I live within my means which means not spending 65% of my income on housing+utilities. Additionally I am just not happy in the house and dont want to be unhappy with it for 15years until I can sell it, however having a 60k$ debt after getting out of the house will also make me very unhappy.

[foolishbuyer]

Originally Posted by FlyingRon

You can't do a short sale unless both lenders agree.
I have no clue what you mean by "giving a deed to the 2nd."

Yes the two lenders can sue you for the deficiency.

Unless you have a way to "cure" the default, you're not going to "delay" the foreclosure and I'm not even sure why you would want to.

How aggressively the lenders try to collect on the deficiency against someone with no assets is uncertain. You better go make that security deposit before they get to your bank account however (if you can find anybody willing to rent to you).

I don't entirely understand the giving the deed to 2nd either which is why I was asking about it here.

The idea is to sign over my rights to the 2nd lender who will do the sale rather than me or the primary lender, the 2ndary lender would then say sell the house for 140k$ get their 40k$ and give 100k$ to the primary lender who is owed 160k$ as if it was a short sale, hopefully the primary lender would not pursue me at that point.

[foolishbuyer]

Originally Posted by FlyingRon

You can't do a short sale unless both lenders agree.
I have no clue what you mean by "giving a deed to the 2nd."

Yes the two lenders can sue you for the deficiency.

Unless you have a way to "cure" the default, you're not going to "delay" the foreclosure and I'm not even sure why you would want to.

How aggressively the lenders try to collect on the deficiency against someone with no assets is uncertain. You better go make that security deposit before they get to your bank account however (if you can find anybody willing to rent to you).

The reason I need to delay the foreclosure is to give more time to try to get an offer to propose a short sale.
Assuming the short sale is my best option to get out of the house/loan

[FlyingRon]

Originally Posted by foolishbuyer

I don't entirely understand the giving the deed to 2nd either which is why I was asking about it here.

The idea is to sign over my rights to the 2nd lender who will do the sale rather than me or the primary lender, the 2ndary lender would then say sell the house for 140k$ get their 40k$ and give 100k$ to the primary lender who is owed 160k$ as if it was a short sale, hopefully the primary lender would not pursue me at that point.

Are you making this up? There is no way that can happen.

You can't do a short sale unless both lenders agree to it. Unlikely to happen (unless they are the same entity).