Close

See current mortgage rates on Zillow Mortgage Marketplace

Profile picture for dddnn123

What should I do with my home?

My wife bought a townhouse in 2006 (several years before we were married). She paid $160,000 and they are now selling for ~ $85,000 (we owe $120,000). My name is not on the title, mortgage, or anything – the place is only under her name. 

We both make very good money and can definitely afford the home, but we really need to move (starting a family, closer to work, etc.). We're thinking about walking away from the home, but want to make sure that only her credit will be affected and not mine (this way we can still buy another place only under my name). Besides that, we're at a loss for what to do. We can't rent out the home due to association rules and we can't afford to sell the place at such a huge loss and still buy another.

Any suggestions / options would be helpful.

Thanks.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 26 2011 - Elgin
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (12)

I would talk with the association and see what they can do. I'm sure in this market yours is not the only unit in trouble. I know the rules are the rules, but they may have modified them or are going to modify them given the current conditions. The more units not paying dues becomes a drain on the other members so it's worth talking with them. The other option, put a family member (is best)on title that could live there. Have it in a trust and any sale controlled by the administrator (your wife) so there is no issue with a family member when you do want to sell. This is an idea, but I would run this by an attorney before you do anything.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 27 2011
Walking away is a last resort - having no other options. Your wife would damage her credit severely for years including the possibility of recourse from lender for deficit. Any purchase in the 4-5 yr. future would have to be strictly in your name/income which will lower your price range. If leasing was possible it is not a magic solution. There are reserves, counting 2 payments, and potential carrying cost of 2 properties when vacancy occurs.
As others have stated, discussing situation with a real estate attorney should be imperative before you consider walking away, short sale, deed in lieu of foreclosure, etc.
With all of the potential negatives discussed, being patient could prove to be a much better solution when the market improves. In the meantime I would work on resolving non rental HOA by- law restrictions. Majority of homeowners should not want to reduce their property rights, and can vote to amend by-laws/Convenents & Restrictions.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 27 2011
The association can fine for violating the bylaws. Then if you don't resolve the issue and they want to play hardball after you haven't complied with thier demands and paid thier fines, they can seek to foreclose on the unit.I would recommend speaking with a real estate attorney as if you do a lease with an option to buy , you will need an attorney to draw up the contract.  The problem that I see with the lease with an option to buy is that lets say you find a buyer, they are going to want to pay todays market prices for the home.  You say todays market prices are about 85K and you owe 120K. So if you sign up a lease with an option to buy for 85K and they rent from you for two years and now they want to exercise the option to buyfor 85K and you still owe 110 to 120K on you will need to come up with the difference at closing
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 27 2011
Sorry to hear about your situation. I would definitely talk to the home owners association and explain your hard ship. A short sale may be hard because of your incomes. I think a long term lease would be great. Hopefully you can talk to a rental management company and do it that way. They collect the rent run the credit and criminal history. Hopefullymthat would help make your payments. Make it income instead of a loss.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 27 2011
Profile picture for dddnn123
Thanks for the advice. I will definitely contact the lender to see what they say, but since we don't have a financial hardship, we may be out of luck there. Also, I didn't realize that they could still come after my wife if we walk away - that's good to know.

There is nothing in the bylaws about lease, rent-to-own, etc., so we could potentially go that route. We would need 70% of homeowners to vote to overturn the no renting bylaw, which is going to be very difficult to come by. Does anybody know what legal ramifications there are if just rent anyways? Can the association really do anything to us?

Thanks again.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 27 2011
I would contact other homeonwers in your subdivision and find out what they think about the NO RENTING in your bylaws. IF you can gain enough support you can go before your board and look to amend the bylaws of your association. IF you can get them amended them you can rent the property out.  As another poster said the banks aren't just going to grant you a short sale when the only hardship that you have is that the value of your home has decrreased.  When speaking with the board of your association , I would mention that thier strategy of no renters has helped your home values decrease as it has eliminated a strategy for homeowners that are underwater and can't sell. They have left homeowners with the follwoing options Short Sale and Foreclosure.  If people in your sbudivision had the option of renting your units you would maybe have a few less short sales and foreclosures which would help eliminate the errosion of your home values.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 27 2011
What does your HOA say about a Lease option or a self financed sell? This way it's still owner occupied and the mortgage is still paid. Technically it's not being rented.
Remember , you are still liable for making the mortgage payments.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 26 2011
If you guys both make pretty good money, your mortgage holder is more than likley not going to let you short sale since you really have no hardships besides the housing decline. Even in a foreclosure, the mortgage holder can still come after your wife to pay the difference even if you do walk away. A foreclosure is NEVER a good thing to have on a credit record. Their are some government programs available that can help, so check those out. You have the HAMP propgram https://www.hmpadmin.com/portal/index.jsp  the HAP program if your military: http://hap.usace.army.mil/. And the Emergency Home Owner Program: http://www.nw.org/network/foreclosure/nfmcp/EHLPconsumers.asp.  Take a look at the HUD website about avoiding foreclosure to see if anything can be useful to you: http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure.  I hope this helps!!
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 26 2011

Have you spoke with the lender? I would recommend that to be your first step.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 26 2011
It sounds like you should Short Sale your home. You can find another home in just your name
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 26 2011
Profile picture for dddnn123
FYI, this is in Elgin, IL
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 26 2011
As you mention your income is good, if  you can qualify based on your income then yes you can buy only on your name. I am Texas , if you are in Texas you can send me email:
1st thing underwriter is going to look for is, is  this house is  bigger house  then the one you currently reside in and is this  house is close to your work to be consider as primary.
2nd they might asked for 6 months of reserve for both house payments ( PITI) since current residence in not sold.
3rd 12 months of Mortgage history to verify you guys are not late on current mortgage.

or maybe they want ask for anything and it will be smooth closing.

Foreclosure will only come on her credit since you did not sign note or deed.

This info is only for Information purpose.


  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
July 26 2011
 
Related Questions
Mortgage after very late transfer of deed
Profile picture for Patty  Harrison
Latest answer by Patty Harrison
September 30 2013 | 4 answers
Bankruptcy/Foreclosure and getting a new mortgage
Profile picture for Barb Lanis
Latest answer by Barb Lanis
July 22 2013 | 3 answers
  • Asked by user00364558
  • In Mortgage
  • July 19 2013
What can I do to get more (or better) quotes for my loan request ZR-MVTRYDN?
Profile picture for user1594532
Latest answer by user1594532
June 12 2013 | 2 answers
  • Asked by user1594532
  • In Mortgage
  • June 12 2013
What can I do to get more (or better) quotes for my loan request ZR-NJXBQXP?
Profile picture for Jeffrey  Smith
Latest answer by Jeffrey Smith
May 11 2013 | 3 answers
How soon will I be eligable to buy a house after a deed in lieu took my last house?
Profile picture for Ken Burrows
Latest answer by Ken Burrows
February 12 2013 | 5 answers
  • Asked by user7517674
  • In Mortgage
  • February 11 2013
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 1450 Plymouth Ln APT 601, Elgin, IL Home For Sale
    1450 Plymouth Ln APT 601, Elgin, IL 60123

     For Sale: $149,900

    • Beds: 3
    • Sqft: 2254
    • Baths: 2.0
    • Lot: --
  2. 204 S 1st St, West Dundee, IL Home For Sale
    204 S 1st St, West Dundee, IL 60118

     For Sale: $309,900

    • Beds: 5
    • Sqft: 3424
    • Baths: 6.0
    • Lot: 14374
  3. 315 Comstock Dr, Elgin, IL Home For Sale
    315 Comstock Dr, Elgin, IL 60124

     For Sale: $344,900

    • Beds: 4
    • Sqft: 3106
    • Baths: 3.0
    • Lot: 21344