Relocating, What To Do With Underwater Mortgage

Lounge By adonisthegreek1 Updated 16 Jun 2010 , 6:40pm by Elcee

adonisthegreek1 Posted 15 Jun 2010 , 6:08pm
post #1 of 12

My whole subdivision is being tore apart due to job loss. We have already lost so many friends, and homes are just sitting empty. The biggest question my friends ask is what do you do with your house when you get a new job out of state, but can't sell your house because it's worth a lot less (underwater) than you paid?

I have no answers. In our case, a relative assumed our mortgage.

11 replies
Elcee Posted 15 Jun 2010 , 6:33pm
post #2 of 12

In a lot of cases, the banks may take a deal, that's if the house can even be sold. Say, if you owe $200,000 and get an offer of $175,000, make an offer to the bank and see if they'll call it even. Most of the time they'd rather see some money instead of having to foreclose and be stuck with (another) house. You're lucky you had a relative to take over the mortgage, but you still must have taken a hit, I'm sorry to hear that. We were where you are back in the mid-nineties.

indydebi Posted 15 Jun 2010 , 7:08pm
post #3 of 12

I've heard the term "upside down" but never "underwater"! icon_lol.gif

I've read many many stories about how home equity is just a dream that many will never achieve anymore. In some areas of the country, people are just walking away from their homes. For example, they paid $500,000 and now it's only worth $200,000. If they stay there and pay the entire 30 year mortgage, they have a slim to none chance of ever just breaking even, let alone coming out ahead. So they are throwing up their hands, handing the keys to the bank and saying, "I'm done. It's all yours."

mkolmar Posted 15 Jun 2010 , 10:55pm
post #4 of 12

I know a lot of people in MI who are doing just as Indy said. They are all moving and just letting the bank take the house.

Doug Posted 15 Jun 2010 , 11:37pm
post #5 of 12

if can find a reliable manager -- RENT it out.

Karen421 Posted 16 Jun 2010 , 1:31am
post #6 of 12
Originally Posted by Doug

if can find a reliable manager -- RENT it out.

I would think that would be a better option - that way your credit would not be ruined for 7 years.

kellikrause Posted 16 Jun 2010 , 3:33am
post #7 of 12

We moved from Mi a few months ago and thankfully found fantastic renters for our house. My husband worked for GM and took a buyout. We knew we could not pay for the house forever so we called the bank to see if we could work something out. They told us until we were behind on our mortgage they would not work with us. WHAT!!! are you kidding me? We were trying to be proactive in case something did happen and we couldn't pay anymore and they wouldn't even talk to us! it was just plain stupid if you ask me. Thankfully we have renters and don't have to worry about it anymore. When we go to sell we may have to do a short sale unless the MI market turns around, because we can't compete with the forclosures that are going for way less then they are worth.

mkolmar Posted 16 Jun 2010 , 3:36am
post #8 of 12

Kelli-- It's backwards isn't it! Drives me nuts.

We want to move but can't. Our house is worth less now than what we bought it for and we even remodeled a good part of it. I'm not willing to ruin my good credit though.

If you can find renters or someone willing to do a rent to own option that would be much better.

dchockeyguy Posted 16 Jun 2010 , 2:52pm
post #9 of 12

I agree on the renting thing. The peopel across the street from us bought their house and were only able to live there for a year when the husband was transfered to New Mexico (air force). They were able to rent it out to people, since they would have lost money on it. I just wish they'd come back. THey were such a nice couple and the renters: Not so much. But I'm sure they are good renters. Just not nice people. *sigh*

7yyrt Posted 16 Jun 2010 , 3:37pm
post #10 of 12

Be aware that when you rent, those renters are holding your home hostage.

Some of the stories people tell of the renters they've had, make me feel that I wouldn't do that unless there was no other way at all.

Karen421 Posted 16 Jun 2010 , 4:50pm
post #11 of 12

I was a landlord for many years after we moved to AR. (came from CT) The young couple we rented to, would call an electrician to change the light bulbs and I had to pay the bill! It can be a royal PITA, but it saves your credit, it would be well worth it! IMHO But everyone's situation is different.

Elcee Posted 16 Jun 2010 , 6:40pm
post #12 of 12
Originally Posted by 7yyrt

Be aware that when you rent, those renters are holding your home hostage.

Some of the stories people tell of the renters they've had, make me feel that I wouldn't do that unless there was no other way at all.

You can't rely on getting that rent check every month either and so need to be in a financial position to make repairs and cover the mortgage, taxes, insurance, etc. when there are gaps in the rental income. Once someone stops paying it can take months to evict them, depending on the laws in your state. Also, if your tenant moves and you don't get a new one in right away you're stuck for anywhere from 1 month to several.

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