Profile picture for sar355

We owe more than house is worth...what to do? foreclosure??

We live in a declining area.  The two surrounding areas are semi crime ridden.  The homes that have sold are tens of thousands of dollars lower than what the homes are worth.  Is it worth it to let the house go into foreclosure?  If not, any suggestions on what to do?
  • May 10 2014 - Covedale
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Answers (7)

There are also other considerations here , if you short sale or "give it back " the bank will credit you with the loss , there are tax liabilities that come with that , that will not go away . example , if you you short sale and there is 30k written off you have to report  that as income !   congress does not seem to be moving on an amnesty extension ,so beware
  • May 16 2014
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Profile picture for Ask Cathy
There are a lot of questions that have to be answered before this can be answered. Just because you owe more that what your house is worth doesn't mean you have to let it go. Are you trying to sell it or move from the area?

If you're trying to sell your house and move the first options are. Either bring money to closing and pay the difference between what it sells for and what you owe. If you can't do that the other option is the pay it down until you have enough equity to sell it at the value of other homes in your neighborhood. Another option is if your just trying to get out of there you can always rent it and move somewhere else. 

Good Luck
  • May 16 2014
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In Ohio the local governments are all about lining their own pockets so they will assess the house for all they can.   I have many friends there that have had the county guy come out and the ask "would you pay such and such to buy this house?"   County records seldom if ever reflect the value high or low of real property
  • May 11 2014
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Profile picture for sar355
thank you for your answers.  Sunnyview, according to the county's appraised value, we are under $14,000. However other homeowners have let their homes go for much less than they are worth.  The last house, after being on the market for over 2 years, was sold for $40,000 less than the appraised value..only because she wanted out so bad.  The house behind us sold for $55,000 less.  We are middle class, so it's not that these homes are huge or overpriced.  People won't pay what their worth because of the two surrounding areas. 
  • May 10 2014
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Profile picture for sunnyview
It really depends how much you are underwater. How much more do you think you owe than you could sell for?
  • May 10 2014
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Profile picture for USMortgageRanger
Depending on when you purchase the home you maybe able to qualify for HARP loan. I would speak with your mortgage company and see if they will do have any form or modification and if have to come come to foreclosure do a deed in lure of foreclosure by giving back the home to the lender.
  • May 10 2014
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1. Don't move if not forced to by job, health. or other life changes.

2.  If you must move opt for a short sale, much better than foreclosure.   Short Sales must always be listed with a real estate agent and make sure the agent has a professional negotiator to hand any sales off to.  Agents should never attempt negotiating with lenders.
  • May 10 2014
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