Foreclosure/Co-Borrower

[shannarae2k]

What is the name of your state? Colorado

I own a Condo in Colorado. I do not live there. It is small and hard to keep rented. I want to sell, but the market simply will not allow me to, unless I take a huge loss, of at least $10k.

The tenant I have in there is going to leave, whether it violates her lease or not...

I am thinking that I may just let the bank foreclose on the condo and let it devastate my credit. I am in a place I like and I can deal with that.

However, my dad co-signed on the unit when I bought it.

How would it affect his credit if it hit the point of foreclosure? I know that they would hound him for money after I defaulted, but then what? Would it just look like a negative mark since the balance owed would actually be on my credit? Would the entire balance appear on both of our credit reports?

Do I have any other options to get out from under the place? I am totally upside down in this property - I am drowning, and need help!!

[LindaP777]

Yep, your dad will be responsible for the mortgage as well as yourself. If he refuses to make the payments, the bank will foreclose and it will ruin both of your credits.

Now, for the really bad part about foreclosures . . . do you know that even when the bank forecloses and sells the house at the sheriff's sale that you could still be responsible for the balance??? So, you might walk away from the condo, but you might not get to walk away from the debt.

[lcannister]

I know Colorado real estate inside out where is the property located and I can tell you your chances of getting out of it soon. I just mean like the county or part of the state not your address.

10K reduction may be the cheap way for you to get out of this as Linda stated they can come afte you for the amount that is not covered by the foreclosure sell.

[HUD-1]

Option 1: Continue to rent, eventually the value will catch up to the unpaid principal balance. (Take the depreciation allowed for tax purposes every year and write off all condo expenses etc.)

Option 2: Approach the lender about a short sale. Get their approval, get an appraisal done and market it/write contract up subject to approval by the lender. Get agreement from lender that they will not pursue a deficiency judgment.

Option 3. Sell it and show up at the closing with the required 10k to fully pay off the loan.
(see if dad wants to help out with the 10k.)

Option 4: worst case scenario, you walk and ruin credit for both of you and potentially be liable for a deficiency judgment. They can go after either or both of you. They could attach liens to your dad's property. Not good, considering that it is only a 10k problem...10k is not drowing, you are only in up to your knees...

[shannarae2k]

Thank you all for your input. I was a HUGE help!!!