What is one to do if he wants to sell real estate, but he bought it not long ago, prices have gone down since he bought it, he has no other substantial assets, and the highest amount he can sell it for is not enough to pay off the mortgage?
I've heard K-Y Jelly eases the pain...
I suppose decide if it's want to sell or need to sell. Maybe hold and hope if it's the former. Any descendants?
No, he needs to sell. He's tried to rent it and can't. He doesn't even live there. He can't afford to pay the property tax. He's too old to mow the lawn and he hasn't the money to pay someone, and the city is fining him. It needs a new roof for 10 or 20K or the rain will damage the inside.
No children or others to lend him money. His only big asset is the property and that already under water. Let's say he paid a million dollars, including 200,000 in cash so the mortgage was 800,000, but prices have gone down and the best offer is $720,000. Not even considering a real estate commission, he needs 80,000 more to pay off the mortgage.
Depends whether it's a "non recourse" State.
In some areas, the mortgage holder can _only_ go after the property, which gives the "owner" [a] the option of calling the bank up and saying "I'm walking out; the keys are under the mat".
This was a common event in the years following the "great recession" of a decade ago.
Look up the term "jingle mail".
In a "recourse" State, the lender can go after other resources but might, or might not.
[a] term used a bit loosely given there's a mortgage and who actually "owns" the land is a bit grey, but you know what I mean..micky snipped-for-privacy@bigfoot.com wrote
Wait for the market to improve so that it least pays off the mortgage.
Or if you are in a non recourse state, just hand back the keys.
Does he have a place to go?
One thing he can do is notify the bank that he is going to walk away. A relative did that a couple of years ago and they worked with him to avoid a lot of crap.
A lawyer may help if bankruptcy is an option.
You must live in a depressed place if real estate is down there. Must be up north somewhere. We aren't quite 2004 (market) here but that seems to be not that far off. Even mobile homes that were stuck at $80k through the boom and bust are $125k now.
Why in heaven's name did he buy it in the first place? Speculation? Investment???
He's screwed. He's lost his "investment", regardless how he ends up solving the problem.
Sounds like another Mikey screw-up.
It is up on the average here in NC.
I'll do that.
I do know what you mean. When I first applied for a mortgage 35 years ago, the bank mortage company agent know all 30+ questions by heart and he must have found his job unsatisfying, because he started off saying "Look, were going to own this house for the next 30 years so this is what you have to do." I think it's clear in Maryland that the owner owns it (and it can take a full year to foreclose), but I didn't correct him. But when he messed with me again, I had no trouble walking away and borrowing the money from my brother (until I could get a mortgage from another bank)
Ed says
It was a hypthetical after a discussion with a friend. I know no one in those shoes, afaik. Copy of all 3 replies to her.
That's good.
I can see why neither of us thought of this. I don't know what the law is in Maryland but fortunately we don't know anyone like that. I do know someone who got divorced and couldnt' afford his house, couldn't afford the mortgage, but the bank discounted the house for the next owner. Maybe from the seller's pov, it was an example of this.
Thanks, all.
BTW, this would not happen to me because I bought far less than my income would have allowed.
But he will be paying the property tax while that happens so it could be a while before that pays off and he could be dead before that happens.
It isnt a non recourse state.
No its non. Non recourse means its entirely the lenders problem if the keys are handed back.
It's apparently a hypothetical. One thing the owner can do is talk to the mortgage holder, see if they will do a short sale, where they agree to a sale price less than the mortgage. If not, the owner can offer to sign over the deed to the mortgage holder. If they refuse, let them foreclose. If the owner has no significant assets, no good income, unlikely a bank would try to sue them to try to recover money. Can't get blood from a stone.
Yup! Obamacrats buy a house, they trash the place and then they walk away. It's all the rich man's fault.
What do you call it the many times that Trump defaulted on debts for his casinos and buildings? And he didn't just walk away, sign the place over to his creditors. He sued them, fought them in court, blamed them for his business troubles. The best one was he sued Deutsch Bank that was foreclosing on one of his buildings, claiming that it was DB that caused the recession in 2008 and that instead of Trump owing them the money on their loans that he wouldn't pay, DB should pay him $1 bil. Needless to say, Trump didn't win that one.....
And add to that all the cities trump owes for security expenses for his campaign rallies that his campaign never paid. He has a habit of not paying his bills. Little contractors, big cities - it doesn't matter.
It wasn't any particular place or particular year, just a hypothetical problem. Sorry for any confusion.
Say Bobb-o, I've been wonderin'.....
Just what exactly does the "F" in your name stand for? I think I've got a pretty good idea- - but since youngsters sometimes read this newsgroup, I'd better not say ;-)
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