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What to tell a friend. Losing a home.

I have a friend that has a home that they are really upside down in Loan amount is around $450K and they can't get a look at $430K. The market is looking at $350K now. They are not behind on payments and this is a second home. But they could be swirling the bottomless pit. They talked about just giving it back to the bank. They just can't make two mortgage payments anymore. The home is empty and they can't rent it for anywhere near the payment.

Talk to bank and see what options they have?

Give it back to the bank with a deed in lieu of foreclosure to save attorney fees?

Try an auction?

They are at a loss. There home appraised for $525K in early 2006. We all know that doesn't matter but they are feeling it now.

Do you have any suggestions?

Posted by Ken Nimmo on 01/28/2008 06:49 AM

Comments (3)

foreclosure, loan, real estate, help, arizona, auction, desperate, trouble, stress, makeoffer

Post is included in group: Prescott

3 Comments on What to tell a friend. Losing a home.

JAN

2008

That is right.... I'm getting the same activity here in Michigan. Its not just loosing equity, but loosing much more. The best case is a short sale. I hope you round up more advice. Lu

A very good friend of mine just went through this.

The bank? Months to try to get through to someone and they are not willing to go too low. There is a blog today on a Realtor's experiences with a short sale.

Deed in lieu of foreclosure? This is what he did, because his attitude (and I think it is the healthiest) is it is only a material possession and "I will own again". He is actually in a home with a lease option to purchase now.

Auction? No one is ready to pay what house values are worth today, much less what is needed to cover the mortgage.

Thanks Ken for posing the question. I will be interested in other responses.

You know as hard as we try it is hard to eliminate your emotions in these deals. Should the friends talk to a lawyer about the effects of a deed in lieu of foreclosure?

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