condo gone underwater

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swimming222
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condo gone underwater

Post by swimming222 » Sat Mar 03, 2012 8:06 pm

I own a second home condo that is underwater. Can I forclose or shortsale if I financed it with a mortgage on my primary home. I only hold the one mortgage. If I forclosed on the condo would they attach my primary home. The payments are to high in our retirement. I've already refinanced at a rate of %4.75. What options do I have?

JDCPAEsq
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Re: condo gone under

Post by JDCPAEsq » Sat Mar 03, 2012 8:10 pm

Did you read the responses to this same question posed by you on February 29th? You can't have a forclosure or a short sale on a home with no mortgage. Your options seem to be to sell the condo and apply the proceeds to the mortgage on your house, retain the condo and use investment assets to pay off or pay down the mortgage, or just keep making monthly payments on the mortgage as you have been.
John
Last edited by JDCPAEsq on Sat Mar 03, 2012 8:14 pm, edited 1 time in total.

Mudpuppy
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Re: condo gone under

Post by Mudpuppy » Sat Mar 03, 2012 8:11 pm

From a technical perspective, the mortgage is on your primary home and you bought the condo with "cash" (even though you financed the "cash" by mortgaging your primary home). So you can't foreclose on the condo. The only mortgage you have is on your primary home. You can sell the condo (at a loss) and applied the money gained in the transaction to the remaining principal on the mortgage, but foreclosure is not an option unless you want to give up the primary home and move into the condo.

Perhaps this is a lesson to not borrow against one asset to purchase another asset.

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damjam
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Re: condo gone under

Post by damjam » Sat Mar 03, 2012 8:17 pm

swimming222 wrote:I own a second home condo that is underwater. Can I forclose or shortsale if I financed it with a mortgage on my primary home. I only hold the one mortgage. If I forclosed on the condo would they attach my primary home. The payments are to high in our retirement. I've already refinanced at a rate of %4.75. What options do I have?
If I am interpreting your post correctly, the mortgage is against your primary residence, not the condo. You took equity out of your primary residence and paid cash for your condo. Unless I misinterpreted what you wrote, I don't see you having any options.

sscritic
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Re: condo gone under

Post by sscritic » Sat Mar 03, 2012 11:45 pm

swimming222 wrote:I own a second home condo that is underwater. Can I forclose or shortsale if I financed it with a mortgage on my primary home.

If you don't pay the mortgage on your primary home, the bank can foreclose and take your primary home. If you don't want them to do that, you can either make your mortgage payments on time each month or pay off the mortgage. In your situation, paying off the mortgage might require you to sell your primary home. The other option is to sell the condo, but that won't cover the outstanding mortgage, so you will have to come up with other money from your savings. That leaves paying the mortgage on time every month, which could come from renting out one or both the primary home and the condo, as others have suggested.

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jeffyscott
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Re: condo gone under

Post by jeffyscott » Sun Mar 04, 2012 1:25 pm

Why not rent out the condo? Perhaps the rent would be enough to cover the payments and allow you to wait for a better market to sell it.
press on, regardless - John C. Bogle

johnubc
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Re: condo gone under

Post by johnubc » Sun Mar 04, 2012 2:10 pm

What property is the mortgage on?? That is the property that will be foreclosed or short saled.

Mudpuppy
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Re: condo gone under

Post by Mudpuppy » Sun Mar 04, 2012 5:53 pm

Doesn't really matter what the morals are, there's no legal way the OP can have the condo foreclosed upon when the mortgage is on the primary residence.

sscritic
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Re: condo gone under

Post by sscritic » Sun Mar 04, 2012 6:06 pm

Mudpuppy wrote:Doesn't really matter what the morals are, there's no legal way the OP can have the condo foreclosed upon when the mortgage is on the primary residence.
Exactly. If he doesn't pay his mortgage, they will foreclose on his primary residence. He paid cash for the condo, so it can't be "underwater."

Ptk70
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Re: condo gone under

Post by Ptk70 » Sun Mar 04, 2012 9:04 pm

You want to foreclose on a property that's already been paid off???

sscritic
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Re: condo gone under

Post by sscritic » Sun Mar 04, 2012 10:05 pm

Wolkenspiel wrote: The condo is under water, something needs to be foreclosed on to stick it to the man.
What is your definition of underwater? The condo was bought with cash; it has no mortgage.

Quiz:

1) Paid $200,000; mortgage $150,000; current value $100,000. The house is
a) $0 underwater
b) $50,000 underwater
c) $100,000 underwater
d) none of the above

2) Paid $200,000; mortgage $0; current value $100,000. The house is
a) $0 underwater
b) $50,000 underwater
c) $100,000 underwater
d) none of the above

P.S. Which man are you talking about? The OP man?

Alex Frakt
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Re: condo gone underwater

Post by Alex Frakt » Tue Mar 06, 2012 2:02 pm

I've had to strip out a dozen off topic responses on this thread. General discussions (as opposed to questions about specific and real situations) about the morals and habits of mortgage defaulters and/or banks are not acceptable on this site.

statsguy
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Re: condo gone underwater

Post by statsguy » Tue Mar 06, 2012 2:08 pm

It seems to me that your option is to sell the house and live in the Condo. This would get rid of the mortgage, which seems to be your main complaint.

Stats

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Midwest_Investor
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Re: condo gone underwater

Post by Midwest_Investor » Tue Mar 06, 2012 3:25 pm

You could wait for the condo to go up in value again. If you are able to make the payments, then you could just keep making the payments.

Muchtolearn
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Re: condo gone under

Post by Muchtolearn » Tue Mar 06, 2012 5:23 pm

Mudpuppy wrote:Doesn't really matter what the morals are, there's no legal way the OP can have the condo foreclosed upon when the mortgage is on the primary residence.
Not true. The condo can be foreclosed on by the local taxing authorities or the condo association if OP doesn't pay the bills.

This post is very sad to me. OP was a well intentioned but obviously unsophisticated individual who did not understand the ramifications of taking on the debt he did on his primary residence. He was a victim of the vultures.

sscritic
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Re: condo gone under

Post by sscritic » Tue Mar 06, 2012 5:33 pm

Muchtolearn wrote: He was a victim of the vultures.
I won't respond, because I read what Alex wrote above. I suggest you read it as well and stick to the topic.
Alex Frakt wrote:General discussions (as opposed to questions about specific and real situations) about the morals and habits of mortgage defaulters and/or banks are not acceptable on this site
.
"Vulture" is a loaded word just dripping with morality.

campy2010
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Re: condo gone underwater

Post by campy2010 » Tue Mar 06, 2012 7:05 pm

Poor grammar, few details, two threads and no responses to either one makes me think this is a TROLL post.

Alex Frakt
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Re: condo gone underwater

Post by Alex Frakt » Tue Mar 06, 2012 7:36 pm

campy2010 wrote:Poor grammar, few details, two threads and no responses to either one makes me think this is a TROLL post.
I'm beginning to wonder if you are right. Given the amount of OT posts and non-response of the original poster, I'm going to lock the thread.

swimming222 -
If you want me to reopen this thread, please send me a PM by clicking this link: http://www.bogleheads.org/forum/ucp.php ... pose&u=254

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