Money Mortgage experts: need some help

**The Bad Guy** · 09-08-2008, 03:41 PM

One of my best friends is in a huge bind down in Northern VA.

He purchased a condo 4 years ago on an interest only loan. At the time, things were booming down here. He knew he wouldn't live in VA forever, so he took that loan thinking he could make some coin when he left.

He miscalculated.

His wife just had a baby in April and they are dying to move down to North Carolina to be with family.

Problem is, he has few options with the condo. He would owe 80 grand at closing right now due to the nosedive the place took.

Does he have any real options that won't ruin his credit? He can pay the mortgage every month, but he just wants to get out of here.

(and no, this "friend" isn't me. I was smart enough to stay away from the real estate market down here and just rented).

Thanks in advance for any help. He's pulling his hair out trying to come up with something.

Spott · 09-08-2008, 03:43 PM

If he short sells his home he will ruin his credit, but maybe he can rent the place out until the market value possibly goes up enough to where he can break even on the condo.

SBK · 09-08-2008, 03:44 PM

Quote:

Originally Posted by Spott

If he short sells his home he will ruin his credit, but maybe he can rent the place out until the market value possibly goes up enough to where he can break even on the condo.

New FHA program. Wipe out part you owe above what it's worth for no penalty to your credit.

Spott · 09-08-2008, 04:29 PM

Quote:

Originally Posted by SBK

New FHA program. Wipe out part you owe above what it's worth for no penalty to your credit.

Really? So a person can sell their house for 30K less, not pay off the debt and their credit wouldn't be screwed? Can that be done for conventional loans too?

SBK · 09-08-2008, 03:44 PM

Tell him to find someone familiar with the new FHA program, and the new regulations from the housing bailout bill. Especially the part about wiping out the difference between what you owe and what your place is worth.

**The Bad Guy** · 09-08-2008, 04:01 PM

Thanks SBK.

I just talked to him. He looked into that program. But he said that it's for people who can't afford their mortgage because of rising costs.

His problem is he can pay all his bills and doesn't struggle enough that he can't afford his place to get gov. assistance.

He just wants to be able to sell his condo without taking such a monsterous hit.

SBK · 09-08-2008, 04:06 PM

Quote:

Originally Posted by The Bad Guy

Thanks SBK.

I just talked to him. He looked into that program. But he said that it's for people who can't afford their mortgage because of rising costs.

His problem is he can pay all his bills and doesn't struggle enough that he can't afford his place to get gov. assistance.

He just wants to be able to sell his condo without taking such a monsterous hit.

Then tell him he picked a bad time to buy and he's screwed.

**The Bad Guy** · 09-08-2008, 04:11 PM

Quote:

Originally Posted by SBK

Then tell him he picked a bad time to buy and he's screwed.

I did.

He didn't listen to me when I told him renting was the way to go if we weren't planning on living down here for a long time.

**The Franchise** · 09-08-2008, 04:15 PM

I would just recommend that he tries to rent it out.

**The Bad Guy** · 09-08-2008, 06:26 PM

Quote:

Originally Posted by pestilenceaf23

I would just recommend that he tries to rent it out.

I think that's the route he's going to take.

Only problem is he wants to move far out of the area so I don't know how he'd manage it.

**DaFace** · 09-08-2008, 06:36 PM

Quote:

Originally Posted by The Bad Guy

I think that's the route he's going to take.

Only problem is he wants to move far out of the area so I don't know how he'd manage it.

It'll cut into the amount he's getting out of it, but there are often local rental management companies that will manage the whole deal, provide maintenance services, etc. for a fee.

**MahiMike** · 09-08-2008, 06:19 PM

I do short sales in Jax, FL. Good news is, he can live rent free for at least 12 months while the lender forecloses. Tell him to save $, buy a home BEFORE they file FC proceedings, and then walk away...

**BigMeatballDave** · 09-08-2008, 06:58 PM

Quote:

Originally Posted by MahiMike

I do short sales in Jax, FL. Good news is, he can live rent free for at least 12 months while the lender forecloses. Tell him to save $, buy a home BEFORE they file FC proceedings, and then walk away...

Is this possible? Seriously, I don't have a clue how forclosings work.

Chief Henry · 09-08-2008, 06:25 PM

I'm sure there is a lesson in this story...

**The Bad Guy** · 09-08-2008, 07:07 PM

Quote:

Originally Posted by Chief Henry

I'm sure there is a lesson in this story...

Sure is.

Never buy real estate on an interest only loan.

For the short sale, how can he live rent free?

09-08-2008, 03:41 PM	Topic Starter
The Bad Guy Scott Pioli Join Date: Jan 2001 Location: The Copacobana Casino cash: $9283645	Mortgage experts: need some help One of my best friends is in a huge bind down in Northern VA. He purchased a condo 4 years ago on an interest only loan. At the time, things were booming down here. He knew he wouldn't live in VA forever, so he took that loan thinking he could make some coin when he left. He miscalculated. His wife just had a baby in April and they are dying to move down to North Carolina to be with family. Problem is, he has few options with the condo. He would owe 80 grand at closing right now due to the nosedive the place took. Does he have any real options that won't ruin his credit? He can pay the mortgage every month, but he just wants to get out of here. (and no, this "friend" isn't me. I was smart enough to stay away from the real estate market down here and just rented). Thanks in advance for any help. He's pulling his hair out trying to come up with something.
Posts: 23,216

09-08-2008, 03:43 PM	#2
Spott Court Jester Join Date: Aug 2000 Location: Orlando Casino cash: $-867600	If he short sells his home he will ruin his credit, but maybe he can rent the place out until the market value possibly goes up enough to where he can break even on the condo.
Posts: 20,698

09-08-2008, 03:44 PM	#5
SBK Curry is the pick??? Join Date: Mar 2004 Location: Georgia Casino cash: $10004900	Tell him to find someone familiar with the new FHA program, and the new regulations from the housing bailout bill. Especially the part about wiping out the difference between what you owe and what your place is worth.
Posts: 8,153

09-08-2008, 04:01 PM	#6
The Bad Guy Scott Pioli Join Date: Jan 2001 Location: The Copacobana Casino cash: $9283645	Thanks SBK. I just talked to him. He looked into that program. But he said that it's for people who can't afford their mortgage because of rising costs. His problem is he can pay all his bills and doesn't struggle enough that he can't afford his place to get gov. assistance. He just wants to be able to sell his condo without taking such a monsterous hit. __________________
Posts: 23,216

09-08-2008, 04:15 PM	#9
The Franchise Most Valuable Villain Join Date: Dec 2006 Casino cash: $2065047	I would just recommend that he tries to rent it out.
Posts: 92,316

09-08-2008, 06:19 PM	#12
MahiMike He's Mahomie! Join Date: Aug 2001 Location: Jax, FL Casino cash: $10023443	I do short sales in Jax, FL. Good news is, he can live rent free for at least 12 months while the lender forecloses. Tell him to save $, buy a home BEFORE they file FC proceedings, and then walk away...
Posts: 17,387

09-08-2008, 06:25 PM	#14
Chief Henry MVP Join Date: Aug 2000 Location: IOWA Casino cash: $10005088	I'm sure there is a lesson in this story... __________________ Patrick Mahomes...The only QB to ever play in the NFL with at least 5,000 passing yards in a single season and 5,000 passing yards in a single college season.
Posts: 8,361