Are You Defaulting on Your Home Loan? - The Bills.com Blog

We have two homes in California. One on the market now for almost 2 years, and one that we moved into before the other sold due to a "no contingency" request at escrow. Now we have 2 "jumbo" loan payments and we are starting to place the 1st house's payments on credit due to the rise in intrest rates this past sept. Any advice as to ease the pain? Are we doing the right thing? Is there a quicker way to stop the bleeding? HELP!!!

Stacey - that is an increasingly common situation. You have three basic options: i) refinance the two loans together, or ii) sell one or both of the homes (if you have equity in them), or lastly, iii) default on the mortgage and hand the loan over to the bank (if you have no equity). I would first advise you to get the home appraised and guage how much equity you have. If it is substantial, think seriously about being aggressive about selling or refinancing the home (Bills.com has many free resources for getting mortgage quotes and wwww.zillow.com has free data on valuing your homes). If the equity is zero you can contemplate defaulting on the home or handing the mortgage over to the bank in a 'deed in lieu' transaction.

We thought we pruchased an as yet built home in florida. we live in California, now the investment co, the developer and the real estate brokers have all closed their doors and we don't know if we have a house or not. the contractor will not even return our calls. Even though the original lender has not informed us they have "sold" our loan, we are being pressured by a another lender to sign their loan documents. Ee have already sign documents with someone else. What this comes down to is, what will happen to us if we simply default on the loan (we don't know if we even have one) can we loose any real estate property that we own in California? Thank you

You should check your credit report immediately. You can get a free credit profile at www.annualcreditreport.com. If you see that the mortgage is reported in your name, it will definitely have an adverse impact on your credit score. As far as loosing your current property in California, I don't think there is an immediate danger. But the recourses on mortgage default vary from state to state and you should consult an attorney to discuss your current situation.

I lost my job in Michigan and moved to Georgia for a new job. I'm getting no offers on my empty Michigan home at a zero equity sales price (a $70K loss). It is costing me $1500 a month to sit empty. If I was to default on that loan, could the lender come after me for future wages or other assets the were not collateral? How long would my excellent credit rating be trashed? Please e-mail me your answer.

Rick, if you default on your current mortgage, your lender will eventually start the foreclosure process. Once the home is auctioned off, and if the proceeds of the auction are not enough to satisfy the outstanding debt, then whatever is left over will be considered a "Deficiency balance". Now, this debt will be considered unsecured as there no collateral against it now. The lender might try to collect on this debt in pretty much the same fashion as any other unsecured debt. The recourses available to your lender in collecting this debt would depend on your state laws. For more information on collection laws, please visit http://www.bills.com/collection-laws/. A foreclosure has a pretty big impact on your credit which could last for as long a 7 years. I suggest that you try and work out some sort of an arrangement with your current lender, and even discuss a "Short sale" or a "Deed in lieu of a foreclosure" with them. For more information please visit http://www.bills.com/foreclosure/. I hope this helps you.

im going to default on my home loan we cant make the payments any more how long do i have before they force me out how long can i continue to stayin the home before they kick me out

Depending on when they initiate foreclosure, the process could take up to a month.