I have a loan with Taylor Bean and I am underwater. I bought for 230,000 in 2006.

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You stick in the home, make your payments til the equity starts building back up, then sell. Or short sale, which COULD ding your credit. Like everyone else said. Talk with an attorney.

Donnovan,

"Our attorney's position has always been "why would you continue to make payments on a property that has no equity?""

Are you kidding me? First, b/c that is a contract, obligation you made to a bank. If you had borrowered that money from family, would you just say whatever and walk away?

Second, its not like equity has dissappered and is gone forever. Equity will build back up. People won't be stuck in a rut forever.

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February 24

stevenrichter
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John Smith, "Noel Packard"

Any others have good sound advise?

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February 24

John Smith, "Noel Packard"
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The best advice that you could get on this is at [content removed by moderator for being self promotional] The site was set up to help people get high quality recommendations about how to deal with their debts. They saw that the debt industry was full of sharks and wanted to provide a service that made getting honest advice easy.

[content removed by moderator for being self promotional]

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February 21

Roberto Ribas, "azrob"
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Roberto Ribas, "azrob"

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Gregorio Denny, "Gregorio Denny"

donovan is speaking out of his tail. In many states, the lender cannot come after you for a deficiency for a purchase money mortgage on a primary residence. AZ/Cali are among those states, you will have to check out your local laws. In others, in practice they don't come after you anyways. In arizona, if the lender does a trustee sale, thats that. If they want a deficiency judgement, they have to do a judicial foreclosure, which takes much longer and costs much more, so they are quite uncommon.

Now, if you are doing a short sale, and the banks insists on a promissary note, why would you do it? why short sale and still owe the money, when you could simply live free for six months or more, and then leave after the foreclosure with no debt at all? either way your credit is whacked, are you going to tell me the difference between 'really bad' credit and 'terrible' credit for a couple of years is worth a whole bunch of money? of course not!

stay away from the scammers, get competetent local advice, both legal and real estate.

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February 21

Gregorio Denny, "Gregorio Denny"
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Donnovan Stordahl, "dstordahl"

Steve,

Whatever you do, just know that there are unscrupulous people out there looking to prey upon people in situations just like yours. The passage of this stimulus package with all of it's vague information has caused many to come out of the woodwork like roaches in the darkness. These are the characters that could not make a buck doing business the right way, but have suddenly designated reappeared as "loan modification experts", "short sale experts" and whatever other creative name they can come up with.

Larry has given you sound counsel. Donnovan McExpert it appears, has other motivations. (In my opinion)

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February 21

Donnovan Stordahl, "dstordahl"
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Hi Steve:

Larry won't be able to answer that question, as he is not experienced in Short Sales.

Here's how it works:

1.) You receive a contract on your property.
2.) It is submitted to the Lender (Investor) for approval.
3.) The Lender (Investor) will counter or approve the offer.
4.) When that approval is received, you will know exactly what is required of you, the homeowner. This could include:

a.) A non-secured promissory note for the difference owed;
b.) Other conditions from the Lender (Investor);
c.) No Taxable Consequences (Bush signed into Law the Mortgage Debt Forgiveness Act of 2007).

Now, having said all of that, whatever resolution is obtained, DOES NOT prevent the Lender from wacking your credit for a "Settled for Less than Full" on your credit report, which will not affect it as bad as a Foreclosure.

However, the alternative to that situation is going into Foreclosure and being completely responsible for the entire debt (if they should choose), plus the negative impact of a foreclosure on your credit record.

No one has a crystal ball to tell you the impact of each decision you make ... it's not until you have the Lender (Investor) approval that you will know exactly what they (Lender / Investor) are requiring from you.

Our attorney's position has always been "why would you continue to make payments on a property that has no equity?"

I have also seen clients that had to take a non-secured promissory note for their Short Sale, stop paying on it, and get it removed from their credit report.

These are my experiences in today's recession, so I hope it has helped.

Feel free to blog again with any additional questions.

Thanks!

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February 21

stevenrichter
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Thats what I thought Larry. I didnt think that Obama would be doing that for everyone. Would a short sale be against my credit?..I dont want that.I have a 670 score and getting better.I dont want to hurt that..My Fiance doesnt make enough to get a house on her own.. She has a great credit score, but her income is low. Together we will be over $100,000 income...This is what I would like to happen.. I want to sell my home and hers and move about 40 miles from where we are at and buy our new home together. I have a 18yr old and a 21 yr old and she has a 23 yr old who is mentally challenged. So all of them need a bedroom..
I'm stuck.....

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February 21

Larry Jacobson, "Clearpoint"
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Donnovan Stordahl, "donnovanstordahl"

Donnovan,

Again I have flagged your post, please do not spam the post with solicitations. No where did the new program say they are paying down the principal. Your ignorance is causing false hope. No where did Obama say he would pay the principal down to what is owed. That would cost far too much. If the lender modifies the loan to 38% of a borrowers DTI they will pay to bring the payment to 31%. That is it unless you count the $1000 per year if payments are made on time for 5 years. If the plan was to pay the balances down everyone and the brother would be getting help and this plan does not help everyone. Fannie and Freddie are hoping to refinace their loans up to a mazimum of 105% LTV which will help some but not all.

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February 21

Donnovan Stordahl, "donnovanstordahl"
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Steven: If you want to keep the property and reduce your principal balance and interest rate, you may want to wait until March 4, when the new details will be released from President Obama where the government will pay the lenders the difference between the value in your home and what is owed.

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February 21

Larry Jacobson, "Clearpoint"
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Your right Steven, even if you have a renter for you property you don't have enough equity in the place so lenders would require you to qualify on both payments plus a higher reserve requirement. I still have several lenders that will not touch the deal because they are worried you will just walk away from the original property.

Can you fiance qualify on her own for a larger home? It might not be a bad idea to rent a larger home for your combined families.

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February 21

stevenrichter
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I have thought about renting,but the problem is finding decent renters, cause I couldnt afford a double mortgage if they decide not to pay. My payments are $1900 on a 242,000 loan. Rents arent going for that much in this area. I dont mind taking some kind of a hit, i just dont know if they will give me the loan I want for the new home if I already have an existing one. How does that work? Do you know..I have to get a new home with 4 bedrooms, so hers wont work. It a hell of a scenerio. I really could use some help..

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February 20

Larry Jacobson, "Clearpoint"
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That's going to be tough. You could try to sell your home as a short sale if your lender will approve it, or come up with the difference. If you don't come up with the difference you will not be able to purchase a new home unless it is done soley by your fiance.

Have you considered selling her home and renting yours?

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February 20

stevenrichter
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I am able to afford the payment. I am getting married in 7 month and want to sell and move to combine families. Mine isnt big enough. She is wanting to sell also. I bought the house next door to my now fiance,who wasnt at the time and now we need to sell both to move into one home that is big enough. We both have 3 bedrooms and 2 baths. She has been here since 2000 and has 50,000 in equity. I have negative equity. We need her equity to help bu the next home.

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February 20

Larry Jacobson, "Clearpoint"
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Can you no longer afford the payment? Are you moving? Having the home value less than what you owe should not be the issue it should be whether or not you can afford to live there.

Your lender loaned you the money to buy the house, you owe them back what they lent you which has nothing to do with the homes value.

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February 20

oldskoolballr
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