Hello Chris, and to your wonderful panel;
I attended your Jan. meeting and it was like a hope-full light which shown through some thick dark clouds. Thank you Chris, and all the experts who are participating for your caring stewardship, it is much appreciated.
I have 4 investment homes plus the house I live in. In about the 4th quarter of 2006, 3 of my houses had become vacant all together and needed major repair & maintenance, along with paying the property taxes and insurances, which wiped out my reserves, plus I took out of credit cards to supplement the expenses. My action plan was aimed at repairing the homes and getting them up and rented as quickly as possible. Then the thought was that I would sell 1 to 3 of them and pay back the credit cards, put some of the monies on reserve, and use some of it to put my daughter through college (which she started on Sept. 07).
Dampend by my Dad’s illness, and passing away early last year, repairing the houses took longer then expected, and so once it came time to consider selling them the value of the houses just took a steady dive. And so instead of riding about $400,000 positive on equity I’m now riding about that much negative. Plus I have the added expense of having to cover the credit card debt.
In May 08, I let go paying the mortgage on one of the houses to see what impact that would create overall. I thought that this house would go into foreclosure about 5 months later, but instead the lender, barely, last month approved a short-sale for about $165,000 less then I bought the house for - but then the person who put in the offer backed down.
With the help of a not so experienced realtor (since I could not find a more experience realtor who was willing to assist with all this), we have pursued short-sales on the other investment homes. For the most part, the lenders say that they will not consider a short-sale unless the houses are in default at least 3 months. Therefore, starting last month I stopped paying the mortgages on the other investment homes. But, I am leaving on (and carrying the expense of) the utilities and yard maintenance, so far on the vacant properties.
I guess that at this point the outcome I’d like is to wipe the sleight as clean as possible, or as you said in today’s posting - bow gracefully and back away, without getting deeper into debt; nor incurring a major tax burden, even if it means me going into bankruptcy (which at this point I don’t really know much about). Ideally, I’d like to keep my current home, especially since I have my elderly Mom living with me. But that loan payment is due to go up about $1000 in a couple of years, and so I would need to do a loan modification on it, in order to keep it.
At this point I have an appointment to speak with a Springboard debt counselor, in about 2 weeks (they said they won’t meet with people if you are filing for bankruptcy, only for debt management), since I understand it to be a requirement for filing for bankruptcy. Prior to positioning myself in this mess, my credit has always been real good; but this thing is wipeing me out down to the roots, I’m just hoping that I’m still breathing when I land. Could you please tell me if there is anything more that I can do at this point, such as talking (face-to-face) with some experts (such as yourself Chris, a real estate and/or bankruptcy lawyer)?
In added graditude, I’ll say that one of the hardest things I have found, in this investment learning trip, is to find individuals who can see, and play the whole picture (real estate, escrow, lending, law (foreclosure, short-sale, bankruptsy), Taxes, investing, etc.), your brilliant set-up not only creates this individual, it puts it out there for the rest of us to benefit from. Thank you once again for this brilliant set-up. I look forward to your responses.
Loan Modification, Miscellaneous, Short Sale:Seller, Tax Issues, Training Classes
