Full question:
I am a Landlord I own 5 homes. Two are owned clear and free with a friend of mine under our business that we have strictly for those two rentals. The other two the business is solely in my name I have loans on them. The other is solely in my name and under no business. I can no longer afford to keep paying the mortgages on these homes. They are in a low income area with very unreliable tenants. I have a credit score of 825 with three bureaus. I don't care if my score tanks at this point. My biggest concern is can they put an lien on my personal home that my wife and I have together? I am currently out of work and can no longer keep asking my wife to fund these houses - they are sinking us. She owns a business that is profitable enough to keep the house going and pay for our necessities. If I foreclose will this affect my wife or my other homes that I own outright? How long will this follow me? On the homes I want to foreclose on I owe a total of 140,000 two a lender and the others to a local bank in the area.
- Category: Real Property
- Subcategory: Foreclosure
- Date:
- State: Indiana
Answer:
Courts have held that property owned by husband and wife as tenants by the entireties may not be sold to satisfy the debt of only one spouse. However, property held as joint tenants who are not tenants by the entireties may be sold to satisfy the a sole debt of one owner, up to the amount of that debtor's equity in the property. The non-debtor owner will receive the balance of his share of equity in the property from the sale.
A foreclosure will show up on a credit report for seven years. Depending on the situation, a lender may consider one of the following:
Loan Workout: A loan workout modifies the original loan agreement. Some of these changes may include forbearance (e.g. forgiving a portion of the debt or late charges); deferment; renegotiating interest rate, monthly payment amount, principal amount, maturity date; or the enforcement an acceleration clause in the loan.
Deed in Lieu of Foreclosure: After the borrower is in default, the borrower voluntarily delivers title to the lender for consideration and the lender accepts the conveyance of the property in full satisfaction of the mortgage debt. You can raise your FICO score with deed in lieu by asking the lender to report your situation as PAID - SETTLED instead of foreclosure. Using this method, the lender saves the costs of foreclosure and the borrower avoids having a notice of default on his/her records.
Short Sale: A short sale is a transaction in which a lender allows the real property securing the loan to be sold for less than the remaining mortgage amount due and accepts the proceeds as full payment of the loan. A lender may accept a short sale when the borrower is in severe financial straits and market conditions make a short sale the best choice to mitigate the lender's damages. Like a deed in lieu of foreclosure this saves the lender the costs of foreclosure and the borrower avoids having a foreclosure on his or her credit report
Short Payoff: With a short payoff, the lender accepts less than the remaining mortgage amount as full payment of the loan. The property need not be sold.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
