parentsintrouble

[jenneking]

My parents had their income cut in half and can no longer afford their mortgage. They are upside down by 50-60k so there is little chance they can sell. I believe their options to be loan modification or foreclosure. Their home needs renovations as they have not been able to keep up on things since the income situation went south. What should they do? How long till they could purchase a different home given their economic hardship issue? Will that help them get a home (a much smaller home of course) sooner than otherwise?

 

[Duranie]

It depends on what state they are in. They can try a short sale but short sales are very hard to push through. They should just try to make their payments. If they cannot then the house will foreclose and their credit will be ruined for years. Banks are getting more strict on loans now so they probably would not qualify for another purchase for a couple years.

 

[jenneking]

Thanks, is there a legal mind that could respond? I am leaning towards advising them to let the home go back and having them rent for 2 years. Perhaps find a rent to buy situation on a townhome. Minnesota.
Would 2 years be sufficient?
Their credit is already in the tank because they have only been making partial payments for a number of months now.

 

[jenneking]

no legal minds at thelaw.com??? Any help you can offer would be greatly appreciated?

 

[Theresagail]

If they can not pay for the house then they will have to let it go into foreclosure-- this will take 6-12months for the morgate holder to get them out-- in the mean time they should start saving $$-- they may need to file Bankruptcy depending on if the morgatge company will come after them for the remaining balance after they sell it or not -- also depends on what other bills they have--- there credit will be hurt for a long time--- they will have a hard time buying a house for years to come -- no lender wants to loan out to someone that has already let thier house go into forclosure.

 

[dee_dub]

I don't know what you mean by "legal minds" (possibly "lawyers"?) but you're already getting the only advice there is to give.

Whether a lender will want to give them another mortgage two years after they default on this one isn't a legal issue. It's a credit risk issue.