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What happens when you can't pay mortgage?

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shaylahc

Guest
What is the name of your state? North Carolina

Last fall we bought a new home before we sold our old one. The other house has been on the market for over 9 months and no one has even made an offer. The real estate market is very depressed here because of the economy. The only other alternative is to rent the house out, but we have so little equity in the home that what we could get for rent would barely cover the mortgage. If we ended up with a bad renter, we would have to forfeit the mortgage payment. We can't continue paying 2 mortgages indefinitely. What are our options?

The total owed on the house in the way of 1st and 2nd mortgages is $147K. It's appraised tax value is $127K and it's market value is about $135K. I read somewhere about something called "Deed-in-Lieu of Foreclosure". Can you explain what this is and if this would be an option for us?

We have never had credit problems so I have no clue what happens when you can't pay your mortgage. If they foreclose on your house will you have to repay the difference between what the debt is and what the house sold for?

Any advice on options? Thanks so much.
 


HomeGuru

Senior Member
shaylahc said:
What is the name of your state? North Carolina

Last fall we bought a new home before we sold our old one. The other house has been on the market for over 9 months and no one has even made an offer. The real estate market is very depressed here because of the economy. The only other alternative is to rent the house out, but we have so little equity in the home that what we could get for rent would barely cover the mortgage. If we ended up with a bad renter, we would have to forfeit the mortgage payment. We can't continue paying 2 mortgages indefinitely. What are our options?

**A: Very poor excuse. You were supposed to mitigate damages. What's wrong with renting the property out and sending the rent money to the lender along with your payemnt for the difference?
*************
The total owed on the house in the way of 1st and 2nd mortgages is $147K. It's appraised tax value is $127K and it's market value is about $135K. I read somewhere about something called "Deed-in-Lieu of Foreclosure". Can you explain what this is and if this would be an option for us?

**A: do a search on this website as I have discussed this subject many times along with short sale.
**********

We have never had credit problems so I have no clue what happens when you can't pay your mortgage. If they foreclose on your house will you have to repay the difference between what the debt is and what the house sold for?

Any advice on options? Thanks so much.

**A: if you don't pay, your credit gets messed up and even worse if the lender files foreclosure action.
If the lender auctions the house at a foreclosure sale and there is a difference in wht the slaes price is and what you owe, the lender will get a judgement and go after you.
 

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