Any Legal Way Out Of Mortgage.........?

[anthony185]

Is there any legal way out of a property which has decreased in value by 30%+? If so, what are the implications?

My wife and I purchased a duplex in CT for 220K in 1987. It's current value is maybe 130K (if it would even sell at all, property taxes have sky rocketed in the city where it is located) Current outstanding mortgage is approx 140K. We have good credit, and have always been current in this mortgage.

We moved to MA. about 5 years ago (we rent out the duplex, it almost pays for itself, but it is constant headaches, and city taxes keep increasing) We own a home here, and have a 150K mortgage, and approx 150K equity in this home.

Any legal way out of this dilemma? What would be the legal implications of just giving this property back to the bank? Again, the outstanding mortgage is 140k the current property value of the duplex (optimistically) is 130k.

 

[HomeGuru]

You have substantial equity in the prperty. Sell it.

 

[anthony185]

Home Guru....

Thanks for reading and replying to my post. You suggested selling the property because I have substantial equity in it.
Actually, if you re-read the post, the equity I have (150k) is in the house I live now. On the property in question (duplex) the mortgage is approx 140k, the house (if VERY lucky) might be worth 130K. That's highly debatable though since the city has recently doubled property taxes, and the average sell time in the area is 8 months+

Thanks,
Tony.

 

[HomeGuru]

My response: you are in a good position. Sell the duplex and take the loss. Since you have equity in your primary home residence, take out a small second mortgage to cover the difference.
Or sell on an installment contract. Look for a Buyer who has good credit, good incme but is short on a large downpayment. Sell with a low downpayment as an incentive but make sure that the Buyer's payments cover your mortgage etc.
Or sell based on the Buyer getting new financing but take back a second mortgage such that the Buyer only needs to come up with a low downpayment.
There are various other methods of sale so talk to a Realtor about these and to get firm market values, listing/marketing programs etc.