Legal Question in Real Estate Law in Florida
Should we cut our losses now?
My husband & I purchased our first house north of Tampa in Sept. '07, on a 5 year option arm, with the intent to refi in 2 years. Since then the house has dropped almost 30% in value, my husband's income has dropped substantially (he is self-employed) and we are barely able to make minimum payments (which is also adding to the negative equity). If we continue this way, we will lose the house when the arm is up anyway, b/c there's no way the market will recover enough to break even; therefore refinancing isn't possible b/c of the negative equity. We've now maxed all of our credit cards to stay afloat and we're out of options. The bank will not work with us until we're + 90 past due, and even then, why would they reduce our principal by 30%? Should we just give up now, stop throwing those mortgage payments into the ''black hole'' and ''give'' the house back to the bank and deal with the foreclosure on my husband's credit? We're thinking of renting a less expensive home for 2-3 years while we pay off our credit cards, and then I'll get a 1st time buyer FHA loan to purchase our next home, since I am only on the deed, the mortgage is only in my husband's name. Any options or thoughts on this would be greatly appreciated. Thanks!
1 Answer from Attorneys
Re: Should we cut our losses now?
You're really asking an investment question, not a legal question. Anyway, a short sale may save you from a deficiency judgment, and you should consider it before conceding foreclosure.
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