Question
Rent, Foreclosure and walk away.?
My husband purchased a house for his mother a couple of years(4) ago. She now has financial issues and is moving out of the house since she can not afford to make the payments. We have our own bills and can not make the mortgage payments either. The house in n a bad a neighborhood and needs a LOT of work. So renting the house is pretty much out of the questions because we do not have the cash to put in to fix it up. His credit is bad as she has only made about 2 payments this year. What happens during foreclosure? (we are in AL) after the bank sells the house will they come after us for the rest of the money? will they garnish my husbands check? Should we move in the house? we currently live in a apartment.. We are at a loss about what to do in this situation. We know we do not want his credit to be ruined anymore than it currently is. and Yes I am pissed with her because if the house was in her name she would not be able to pack up some boxes and walk away.
4 weeks ago - 3 answers
Best Answer
Chosen by Asker
Is there any equity in the property? If yes then you want to try and keep it. Many banks are working with homeowners in the HAP program but it is only for primary homes. Call your lender TODAY Is Mother over 59.5 years of age and is there equity in the property? Maybe Mother would qualify for a reverse mortgage. You could move into property and start making payments on the mortgage. If you walk away you still have three plus years before a bank will offer you loan on a new property. Maybe the value will go up and you can make some money in the next 3 to 5 years. If there is no equity: You could consider a short sale. Talk to a good local Realtor and they will help. As far as the bank going after you for a judgment and garnishments look at your foreclosure paperwork. If the lender is waiving the deficiency then they will not go after you. How does foreclosure, short sale or BK effect your credit: • A short sale will ding your credit score by 120-130 points.• A foreclosure will drop your score by 140-150 points. • Bankruptcy can decimate your credit score by 365 points. For more on credit score this is where I have the information: fullsailshortsalecredit ...
by William
4 weeks ago
Asker's Rating: 
Other Answers
I'd move into it myself. That way your credit doesn't take a complete dive, and you have a place to live. The bank might attempt to go after you for some of the money. Over time, you could fix things up and make it into a nicer home. Great Mom.........screws her own son like that. I'd never, never, never, never.......did I say NEVER, co-sign for anyone!! Never ever. In the end, one normally gets screwed. If the bank won't trust these people to pay them back (because of their financial history) WHY should you trust them. NO WAY!!
by Lisa L- 4 weeks ago
We live in CA and we were told that a foreclosure is worse on your credit than a short sale. But a short sale is bad too it is on your credit for 7 or 10 years. I don't remember which one. We put our house up for a short sale, for a lot less than we paid for it.
by Linda- 4 weeks ago