What to do with negative equity?
- Thread starter NanoTick
- Start date
depends on your situation.
in a forclosure, i think they can go after your assets after they repossess the house. in a short sale (different from in stocks) the bank forgives some or all of the negative equity and the homeowner walks.
of course if you don't pay any of it to anyone... kind of a moot point!
in a forclosure, i think they can go after your assets after they repossess the house. in a short sale (different from in stocks) the bank forgives some or all of the negative equity and the homeowner walks.
of course if you don't pay any of it to anyone... kind of a moot point!
Generally speaking, I agree. I am in the same situation. While now we are in a deflationary leg of this bear market. The next leg, IMHO will be inflation, in which case good to hold fix term liabilities. If you have a "toxic mortgage" you can somehow get out of that with some program. Last case, walk - but check out the state laws etc and your credit will be shit for 10 years so better buy a new truck etc.
I don't get the logic in this statement. Being on the losing end is not a new concept. It happens everyday (or did anyways) when people bought a car or a truck, drop a zero and there are plenty of people upside down in an auto loan owning a 30k car with a 40k loan.
The game ain't over till you cash in the chips and if you can afford the payment, stick with it.
If you have a 300k house, you must have enough room to take in a renter or someone who can help with the mortgage payment, till this settles down.
If you default on your property or school taxes it'll take 3-5 years before they could take your house, there could be a substantial savings in monthly outlay by not paying your taxes.
Wouldn't it be great to sell negative equity? Package up a bunch of 100k negative equity deriviatives and sell them for cents on a dollar and someone hands you some cash to tide you over.
Well, if you let the bank foreclose, you are going to have a damn hard time getting a loan to buy another house, which means you will have to rent, which in turn means you get no write-off on your taxes like you did with the mortgage interest from your loan, and assuming properties values stabilize in the near future, you will get no benefit from price appreciation. OTOH, your rent will probably be less than your mortgage payment, and you won't be paying the prop. taxes or maintenance.
Can someone in very simple terms explain a short sale on real estate?
A short sale occurs when the proceeds of a real estate sale fall short of the balance owed on the property. In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor.
The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt.
***Cut and pasted from Wiki!!!
The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt.
***Cut and pasted from Wiki!!!