My partner and I bought a house in Georgia in 1992 with an FHA mortgage loan. We lived there for 17 and 1/2 years straight. Our existing balance on that mortgage is $21,300. In September of 2008, we obtained a HELOC from Bank of America for $50,000. We used the entire amount to purchase another home nearby, which we spent the next year fixing up using our own cash, as the $50K had been spent already on the purchase price. This second home was bought through HUD. We moved to this second home in October 2009 and plan to live here the rest of our lives. Shortly after moving to the second home, we began renovations on the first home. We put it on the market in March 2010. It has now been on the market for over 6 months with no offers. The taxes of that house (because we do not live there) have gone up a tremendous amount. Not only that, but since we are still paying an FHA mortgage there, by law, the house should be owner occupied and it isn't. I do Not want to be a landlord and rent the house out. I just want to be done with this house and all the responsibilities of it. My partner just lost his job and we simply cannot afford the expenses on 2 homes. Recently, I applied for a loan modification for the first house, but since we are not behind in the payments and we do not live there, more than likely they will deny us for the loan mod. Our next step might be a short sale, but I have heard very few of them get approved. The house is worth Less than the total balance of the 2 loans. That much I do know. I don't want us to be facing foreclosure and have judgments against us. We have money in the bank, just not enough to pay off both of these loans. The housing market in our area is not expected to recover for another 2 Years. I cannot see myself paying that mortgage every month for that long! Even at the price the house is now, we won't see any profit if we do get a buyer. I am on Federal disability and this mortgage payment takes up half of my income every month. We were told to talk to a real estate attorney, but if we can't pay our mortgages, what makes them think we can afford an attorney? What should we do?
Please see the Bills.com resource Mortgage Foreclosure Georgia to gain an understanding of your rights and liabilities under Georgia law.
I sense you are not thinking outside of the box regarding your situation. First, you are giving up on a short sale without even trying. Talk to your mortgage servicer about a short sale now and see what you need to do to qualify. Short sales are common and thousands of homes are bought and sold as short sales each month.
Second, consider either you or your partner reoccupying your first residence to reduce your insurance and taxes. No one will be waiting outside of the property with a camera to determine if you actually spend the night there. Either you or your partner should change your address to the first property and declare to your local tax authority and your insurance company it is your residence. Doing so will not help you sell the house, but it will reduce your monthly cash bleed.
Third, do a thorough and objective comparison of your first property to others in the area to determine a fair market price. Stage the property so buyers will be wowed when they walk in the door. Be diligent about maintenance items so buyers will see picture-perfect property when they pull up to the curb and not a checklist of tasks they need to complete before moving in. In other words, offer a turn-key solution and not a problem.
I hope this information helps you Find. Learn & Save.