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Question
My husband and I own a condo in Colorado. We owe about 80k on it and have about 60k in equity. Three years ago I alone purchased a house for my son and his wife a few blocks away from us on a 80/20 interest-only loan in which he is now having problems making the payment. I am a full-time student and unable to financially help him. Both homes were purchased as primary residences, though I am not sure if that makes any difference. If I let his house go into foreclosure, what could I expect as repercussions other than a negative credit outcome? And since my husband is not on the loan, could he be affected? Also, I am wondering what defines primary? Thank-you.
With regard to your primary residence, the lender on your sons property may be able to attach a lien at some point in an attempt to collect a deficiency balance after the sheriff sale. Although unlikely it is possible.
If the foreclosure goes through uncontested nothing much will happen except the sale. Although they have right to collect deficiencies, most do not. This would be my only concern but I wouldn't lose much sleep over it anytime soon. If you are prepared to take the hit to your credit let it go.
You may also ask the lender to take a deed in lieu of foreclosure. They may give you "cash for keys" if you ask.
Let me know if you need more assistance.
Mike
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- How Does A Foreclosure Or Short Sale Affect Your Credit Score
- Will a Short Sale Ruin Credit? - How Credit is Affected by Short Sales and Foreclosures
- Facing Foreclosure - Personal Finance in Your 20s and 30s
Answers by Expert:
Michael Brotherton
Expertise
Consumer/Debtor Rights Advocate. Mike Brotherton is a negotiator with over 30 years experience in consumer lending and collections. Mike has 30 years in the credit and collections industry as a former loan officer, debt collector and manager of two finance companies over several years. Mike is well versed in Loss Mitigation practices and the legal collection process. He has helped literally thousands of people over many years overcome serious financial problems such as foreclosure, creditor lawsuits and abuse by debt collectors. For more information about resolving your "financial emergency" visit www.financialemergency.com. FinancialEmergency.com is a consumer web site which actively promotes Fair Debt Collection Practices and other consumer protection laws. We teach DEBTOR RIGHTS and enforcement of those rights. The more informed you are of your rights and the credit collections practices of creditors the more peace you can have dealing with your FINANCIAL EMERGENCY. Most financial problems are fairly common and as such have some very common solutions. The key is understanding your rights in the collection process and how to enforce them if need be. Primary business- Debtor Rights Advocacy and Debt Mitigation relating to foreclosure, creditor lawsuits, and other serious financial problems. www.financialemergency.com (copy and paste in browser).
Experience
Over 40 years combined experience negotiating disputes and resolving financial issues related to consumer debt, corporate issues and mortgage modifications.
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