Legal Question in Real Estate Law in Oregon

Re: Repurcussions of foreclosure

Although your question is a bit unclear, it appears that you are trying to decide whether to walk away from your condo and allow your lender to foreclose on the mortgage you currently owe for the condo.

This is a very complex decision and should not be made on the basis of brief answers on the internet, but here are a number of considerations:

1. The lender has two choices in a foreclosure - it can repossess the property or it can sue you on the debt. If the property is worth significantly less than the debt and the lender believes you have aother assets, it might chose to sue on the debt rather than take the condo.

2. Whether some of your husband's pension could be attached for the debt depends on the source and size of the pension. Some pensions can be attached for judgment debts.

3. Do you ever want to purchase another property? A foreclosure, especially for the reasons you indicate, will make it very difficult to obtain another mortgage for a long time. Lenders do not want to take a risk on borrowers who have already taken the "easy" way out of a difficult situation.

4. What is the state of the rest of your credit? If you already have a number of credit problems, then a foreclosure will make it worse, but only incrementally. If you have good credit, a foreclosure will degrade it significantly.

5. Where are you going to live if you let the lender foreclose? Most landlords in good buildings will require a credit report and could turn you down with the foreclosure.

6. What is the status of the lawsuit against the architect and what is the likelihood that the association will win and recover damages? The better a case the association has and the better insurance coverage the architect has, the more likely that you will have damaged your credit unnecessarily by allowing a bank to foreclose now.

You need to consult with an attorney and your financial advisors before making a decision like this that will have significant long term effects on your credit.