Money Matters
CantWait2Be
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Mortgage/legal related question
Does anyone know if you have two mortgages (two homes) if you default on one can anything happen to the other house, loan or any other assets? Or does the bank ultimately just foreclose on the house/loan defaulted on? How long would something like this affect credit if all other debts were up to date and minimal other outstanding loans?
Re: Mortgage/legal related question
I am wondering if they would lien the other house???
Defaulting on a mortgage is a huge deal. It will be on your credit for years, at least 5.
And it may depend on the company the mortgage is with what actions they take against you.
Try to rent out your property before letting it be foreclosed on.
I would give this a try. Depending upon so many factors like others have said, they may go after the other house if you foreclose on the one. It may also depend upon your state. They may not be able to force you to sell your residence, but they could put a lean on it so it comes due upon sale. Try to avoid the foreclosure at all cost! Like PP said, it will really screw with your credit.
This. Not to mention, letting a house go to foreclosure is a HUGE headache - it takes forever and it really affects your credit. See if you can rent it out to at least cover the mortgage amount each month.
I believe the laws vary depending on what state you are in (some states are "no recourse" states). In Florida (where I live), the bank is legally allowed to come after you for any loss. A good real estate attorney can minimize damages. In short, yes, depending on your state, you could lose your other home, but with a good real estate attorney it would be very unlikely.
I believe Michigan is a recourse state.
I would be concerned about renting out the house to cover the mortgage. I was in a similar situation and it was a nightmare. We moved for jobs a couple of years ago and because of the market couldn't sell our house, we rented it to cover the mortgage. We didn't have the money to cover the bills without the rent and slowly got behind between the tenant when they didn't pay or paid late, repair costs etc... through the next three years a bad money situation turned into a nightmare.
After researching (both of our homes were in a 'non-recourse' state) we decided we'd try to go for a 'short-sale'. We were declined because it was deemed an investment property not a primary residence. I thought were doomed for foreclosure. After a lot of work with the mortgage company they made an exception for us and we were able to successfully do a short-sale. We were basically able to prove that we moved because of our jobs and attempted to sell the home and couldn't. It was a huge headache but the mortgage company was very fair with us.
Overall I would just caution anyone against renting out a property if they really can't afford it, because very easily it can make a bad financial situation worse.