monthly mortgage, property tax, and home insurance
Submitted by bprm4rnt
from
- 07/23/2008 - 11:37am
Let's say that I decide to foreclose or short sale my house this coming November. Should I just stop paying my monthly mortgage, property tax, and home insurance in November?
~John
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Comments
John -
Depending on what outcome you desire and what your specific situation is will determine what you should do.
I would say two things:
1) Do NOT get foreclosed on. This is virtually always the worst outcome and it can be avoided.
2) Do NOT stop paying your home insurance - this protect you and your bank for not only the home but other things as well.
Why are you projecting this decision until November. You can probably put together a short sale and have the entire process be completed by year end or sooner. I would not wait - the earlier the process is started the better the outcome.
Are your loans purchase money? Is this your primary residence? If the answer is yes to both, then you have a non-recourse situation and there will be no tax liability based on the Homeownership Preservation Act 2007 - The non-recourse is for CA property.
Call or e-mail me with your specifcs - 949-600-5404 or bob@inspiragroup.com
BOB
Bob,
My 1st and 2nd loan is for the purchase of the house and it is my primary residence. I am projecting November b/c this is the time when my insurance and property tax is due. So I'm guessing this will be a good time to throw in the towel and walk away if I don't come up with any other alternatives.
Certainly worth trying to complete a short sale before then, and you should definitely keep paying insurance or as long as you are on title to the house. Insurance doesn't just protect the house... you could even be liable for a squatter that moves in after you leave. Yet another reason to stay until after the bank owns the property and asks you to leave.
John -
I would not wait until November - the taxes are accruing daily and will be paid for by your lender, in the event the approve your short sale. Typically, timing is critical and getting the process started sooner usually gets better results then waiting. It will more then likely take until November +/- to get an offer, short sale approval and have a buyer close on the home.
As alway, feel free to contact me regarding the specifics of your situation. Since the loans are purchase money and your primary residence, there will be no recourse (in CA) and you are protected on any tax consequece because of the Homeownership Preservation Act 2007. In addition, completing a short sale should allow you to purchase a home in 2 years vs 5 years with a foreclosure. So, right now we can get alot done and leave your credit with the best possible outcome.
BOB
It depends on the exact day you will sell the house, it also depends on your insurance contract specifications, for sure you can find these specificiations. Usually you don't have to pay the insurance... You can also address your question at home owners insurance
We have been trying to short sell our house for 6 months now. The bank has taken so long to approve the process that they missed out on several reasonable offers. Now that they have approved the amount, we have no more offers because the buyers have moved on to other properties. We now have a property tax bill , inlcuding Mello Roos due in Dec. What will happen if we do not pay it.
Typically the bank will pay the outstanding taxes to facilitate a short sale. Is your Realtor experienced in short sale negotiations? There really is a art to getting these approved.
good luck.
BOB
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