Can I short sale or let my condo foreclose without the bank taking any of my other assets?
I have no problems paying my mortgage and actually have money in the bank and another home that is worth more than I paid for it.
Problem is, my condo I just bought in 2008 is worth less than I purchased it for – I’ve lost even more than my downpayment on it.
My sister tells me that so long as I never refinanced the original loan on the condo (which I haven’t), I can just stop paying the monthly mortgage on my condo and let it foreclose. It would hurt my credit, but she says the bank can’t touch any of my other assets to recoup their losses.
Is this true? Also, could and would the bank opt to do a short sale on my condo instead? If I had a second mortgage on my condo, could I still get away with doing this?
I’m just curious. I’m probably not going to do this since basically the tax payer would have to cover my losses instead of me but I would like to know my options just in case.
Thanks.
Condo is in California.
Condo is in California.
It depends on your mortgage.
A "non-recourse" mortgage does not allow a bank to pursue you for the deficiency while a "recourse" mortgage does.
2nd mortgages are almost always "recourse" loans I believe.
Remember, most financial advice given by friends,family or co-workers is only wrong about 90% of the time.
Sorry, but no.
If you have no problem paying your mortgage the bank will never allow a short sale.
So it dropped in value…it’ll come back,
Stop trying to get something for nothing. Unless your sister is a lawyer take what she says with a shaker full of salt.
References :
read your posting. What you seek is immoral and unethical. In 2-6 yrs, your condo will
be back up in value. YOU signed a mortgage/note that did not say "I hereby agree to pay
ONLY if the value of my condo goes up."
I am guessing you have a car. ITs value has dropped. Did you –are you–making the
payments on it?
A bank can and MUST protect their assets and their $. they are borrowing it and
lending it to you.
they are ONLY an intermediary.
if you ever borrowed from a relative to buy something, did you expect the purchase
to go up in value?
References :
RE broker, biz teacher
It depends on your mortgage.
A "non-recourse" mortgage does not allow a bank to pursue you for the deficiency while a "recourse" mortgage does.
2nd mortgages are almost always "recourse" loans I believe.
Remember, most financial advice given by friends,family or co-workers is only wrong about 90% of the time.
References :
Why don’t you ask them to modify your mortgage under the new HAMP program? (Home Affordable Modification Program)
There are so many programs including this new one for people just like you that are not late on your current mortgage.
It is called the "HAMP" Modification. Ask your lender about it.
Always communicate with your lender always before doing something that will ruin your credit or consult a real estate attorney that specializes in foreclosure defense.
Try the HAMP first.
References :
It depends on what state the condo is in. Different states have different rules.
Some states absolutely prohibit deficiency judgments on purchase money mortgages.
Some states prohibit deficiency judgments once the lienholder opts for non-judicial foreclosure.
Some states do not prohibit deficiency judgments at all.
It all depends on your state. As you learned in high school civics class, we have 50 states, and each state has its own government, its own legislature, and its own power to pass and enforce its own laws. And, different states have chosen to adopt different laws concerning foreclosure rights and remedies.
References :