Helping my sister get out from under a house in Naples, FL big time upside down. should she walk away or short sale. however owns a home in Ill, that has equity. will they come after her on the short fall and try and take the equity of that home??
brother helping now. :help
No one can answer that question except an attorney. Hire one. There is much at stake.
It is a scary thing when you see that your property value is less than what you owe the bank. This fear has caused many people to default on their mortgages.
Rather than focusing on property value, which will rebound given enough time, focus on having a place to live. If you like your home and can make the payments (even if they are high), you still have a place to live. If your house goes into foreclosure, you will have to live somewhere and will be paying rent (who’s to say it won’t be at or above what you are paying now). Plus, you will have a foreclosure blight on your record.
If you walk away it will adversely affect your credit.
If you short sale it will also affect your credit - but not as bad.
There are federal aid packages that are available for underwater homeowners that you may want to look into.
Sorry to hear about your sister’s situation. It’s nice of you to step in to help. There are serious consequences to both short sale and foreclosure. When you speak to a lawyer be sure to understand fully the importance of a Release of Liability and deficiency judgment. Please check for yourself, but I believe the Mortgage Forgiveness Debt Relief Act expires this December. Hint…
May I ask how far under water she is? If the market in Naples increased annually 20%, how long before she is whole? If the answer to that question is never, then it may make your decision a little easier.
Your lawyer will have a good strategy for you. If it involves selling, and I hope it doesn’t, I may know someone who might be able to help.