I purchased a condo in Florida as an investment. I was advised by the person handling my loan application to say that the property would be my primary residence in order to qualify for the loan. I live in California and have never lived in the property. I have since told this to the banks who carry the primary and secondary mortgages.
I currently owe $142K and the property is valued at under $85K. Both loans are adjustable and interest only. Last year, I requested a loan modification from Wells Fargo (who carries the second) but was turned down as I was gainfully employed. I have since lost my job and will receive severance until Dec 7, 2009. After which, I will be on unemployment at $1950/month. This will just cover my living expenses.
I currently have a renter but the rent falls short of my mortgage and HOA dues by approx $425/month. My mortgage and HOAs equal $1125/month. I am current on my mortgage payments as I am paying out of my severance.
I plan to list the property as a short sale in Dec of 2009 at which time, I plan to stop making mortgage payments. My renter planned to move out on Nov. 30, 2009 but has requested to stay until Dec. 31, 2009.
My questions:
Are banks more motivated to accept a short sale when the borrower has stopped payments?
Since it is an investment property, will I have to pay taxes on the difference between the loan amount and what the property sells for?
Is it even realistic to think that the banks will accept a short sale on investment property?
I was told by Citimortgage (carries primary) that I might qualify for a lean in due (?) but would have to list property for 90 days and have a renter and income. I am not likely to have a renter and my income will probably be unemployment.
I am not optimistic that the property will sell as there are so many condo's listed in the Tampa Bay/Clearwater area. If the property does not sell, what can happen if I foreclose? Can the banks sue me for the money owed when I eventually get a job?
I have some money in saving. Will the banks expect me to completely deplete my life's savings before they consider a short sale?
Is there anything else that I need to consider?
I currently owe $142K and the property is valued at under $85K. Both loans are adjustable and interest only. Last year, I requested a loan modification from Wells Fargo (who carries the second) but was turned down as I was gainfully employed. I have since lost my job and will receive severance until Dec 7, 2009. After which, I will be on unemployment at $1950/month. This will just cover my living expenses.
I currently have a renter but the rent falls short of my mortgage and HOA dues by approx $425/month. My mortgage and HOAs equal $1125/month. I am current on my mortgage payments as I am paying out of my severance.
I plan to list the property as a short sale in Dec of 2009 at which time, I plan to stop making mortgage payments. My renter planned to move out on Nov. 30, 2009 but has requested to stay until Dec. 31, 2009.
My questions:
Are banks more motivated to accept a short sale when the borrower has stopped payments?
Since it is an investment property, will I have to pay taxes on the difference between the loan amount and what the property sells for?
Is it even realistic to think that the banks will accept a short sale on investment property?
I was told by Citimortgage (carries primary) that I might qualify for a lean in due (?) but would have to list property for 90 days and have a renter and income. I am not likely to have a renter and my income will probably be unemployment.
I am not optimistic that the property will sell as there are so many condo's listed in the Tampa Bay/Clearwater area. If the property does not sell, what can happen if I foreclose? Can the banks sue me for the money owed when I eventually get a job?
I have some money in saving. Will the banks expect me to completely deplete my life's savings before they consider a short sale?
Is there anything else that I need to consider?
