AboutDick Dennis Expertise With more than 37 years as a real estate broker, I can solve most any problem presented. If I can`t, I do my research. Problems with mortgages, trust deeds, foreclosures, odd ways of conveying titles. Most any good Realtor can answer questions satisfactorily, but I answer questions that most cannot. Also, ask about my hard-copy newsletter.
Experience Problem solving since 1980
Organizations National Association of Realtors
Publications Publishes The Landed Gentry, guest writer in Who's Who in Creative Real Estate, First Tuesday, Financial Freedom and many newspapers
I have read many of your postings to get some of my questions answered, but I would be grateful for your outside advice if you have time. I do apologize if this is too long I am just worried and frustrated for my fiance and want to empower him with options.
My fiance has owned a 2/2 condo (in Gainesville Florida) within an association for the last 10 years. A few years ago he started borrowing against the equity he had built up in the place to start his own business. This was when his condo value went up drastically. He borrowed a line of credit that ended up being refinanced with his 1st mortgage at a fixed rate, then he took out one last side loan at a high rate again from the equity. Due to some hardships the business had setbacks that were hard to recover from. For the last two years he has done everything he can to pay his loans. The company (HSBC-which he has all 3 with) has become so untrustworthy and difficult in helping him stay on track. He did contact their hardship department and they just want to refinance these loans again with some insane fees and rates. The reality is: He is 3-4 months behind on the 1st loan (which includes the 2nd) and the last one as well. His payments are just paying interest at this point. He is still trying but we both know it's time to sell. With the buyers market as it is he will probably not get the price he wants for his unit (he needs about 156,000 to cover the first two notes) even though it is one of the nicest units in the whole association and we have been working on it knowing we need to sell it. He is also behind with his HOA dues. He has been before but caught up each time. This time he owes around $700. They are usually very nice to him about playing catch up but I don't know how long that will last and these HOA fees are getting worse.
My questions I guess are:
Should we list quick, let the lenders know so that it may buy us time before they speed up the foreclosure process?
My fiance does want to honor his debts even though with a house sale, whenever that happens, it will not cover all of the loans due.
Should we consider a deed in lieu or a short sale?
I have read about both and the deed in lieu sounds not as bad as the other options (foreclosure/short sale).
If deed in lieu is a realistic option would his father being listed on the deed (but not the loan) come back to haunt his dads credit? Should we have his name taken off?
I have heard of IRS penalties with short sales and to make sure we get "no-recourse" sign offs if we do the deed, in writing if the lender agrees. True?
How much time do we have before we are potentially forced out? I have heard 3-6months. I am already thinking that foreclosure has been started on him so I am trying to plan ahead for us both quickly.
Should he keep struggling to make tiny payments towards these loans or just put it towards fees to sell the house (even though he and I can't afford a realtor).
My instincts feel like we may not make a sale in enough time as things are slow. That he should maybe deed it, make payments to the HOA assoc. to get caught up so it won't be a thorn in the shut down process. Save the money from not paying the loans so we can rent some where and start over again.
I do realize that he will be responsible for parts of the loan that could not be recovered from a property sale as it becomes the lenders loss. What should we expect from that?
If you even attempt to answer this without being annoyed I will be so grateful. He is getting to the point of being in a very exhausted mental state to where he doesn't know how to move and it's affecting his health. I can't stand to watch it happen anymore and I can't afford to throw money down the black hole when I feel like I can put it towards a future with new start so he can slowly recover. He has had several seizures from the stress the last few years and I want to stop that from happening again so it won't shut him down long term.
In gratitude,
Jennifer
Answer If I were him, Jennifer, I wouldn't pay another dime to anyone. Nobody can hurry up a foreclosure process. Anybody behind the first mortgage would have to bring the first current if they would take over as the main forecloser. Save what you can to help you move when it comes time. The biggest thing is getting that stress off his shoulders. There is nothing in this world worth running his health into the ground. Like you say, stop throwing good money down that black hole. His credit is already ruined, so it won't make any difference if he does not continue to make payments.
I guarantee you that he will be able to buy another house WITHOUT worrying whether he would need a loan or not. It can be done! It just may not be a house or condo he might want otherwise.
He should go see two people: 1. A real estate attorney to make sure you know what the foreclosure process is in Florida and what to expect in time before you have to move out. 2. A tax expert, a CPA. This way he will know what to expect in the future from the IRS. He is getting a good woman. I do wish you well.
