Quote:
Originally Posted by MRC123  knabrusc
Thanks for replying.
In response to the questions you had we do plan on still paying our other bills and just letting the mortage go.
I don't believe our loan is a HELOC (not quite sure what that is).
knabrusc, are you planning on staying in your home for as long as you can?
I know the situation isn't the end of the world, but your right, when it comes right down to it, it's a business decision, and our own decision to do so, with my families best interests.
So what your saying as far as the tax laws and stuff go, we don't have to claim that portion that the bank lost on our home as income on our taxes even with out that mortage relief act in place or not?? |
MRC123~
Smart
We are also paying all of our bills on time and we should be able to pay off small credit card balance too!
I HELOC is a Home Equity Line of Credit. Basically, instead of taking out one lump sump at once and doing what you want with it you kind of have a credit card to use the money whenever you want up to a certain amout specified from when you took out the HELOC. Have you refinanced at all or is this the initial mortgage you took out when you purchased the house?
We are actually not staying in the house past November 1st. We knew our credit would get hit so we rented an apartment and put the date out 60 days. Our main concern was being able to get into an apartment while credit was still intact. Some apartments here will not rent to you no matter how much you put towards 1st/last months deposit, others state they work with people going through foreclosure. The one's we wanted were the biggest 3 bedroom we could find with a great rate and they stated on their application, if you weren't in at least good standing in all 3 catergories they would not rent, which is why we are not staying in the home and taking as much advantage as we could. I honestly just want to get out of the house and be done with it. Our payment is going to go up $650/month. We were told we barely qualified for a loan modificaiton...I was floored! We are about to have another baby...we need all the extra cash we have! We are continuing to pay the HOA as it does take care of front landscaping and it's only $50/month...we will do so until the bank decides to sell, even though I think I saw some postings in here that said something along the lines of the foreclosure overrides any possible way HOA could come after you, but I would rather not risk it. We also checked our Homeowner's insurance policy and it's paid up through March of next year. You'll want that up to date until bank takes ownership. If something happens, say a tree falls on the house during monsoon, you are liable for that damage and personally I would rather pay a deductible then the whole thing.
You are correct with regards to not having to report it. Check out this link. Part 2, 4th bullet point. Then see part 3, bullet point 1
http://www.irs.gov/newsroom/article/0,,id=174034,00.html
Like I said, as long as your loan is a "purchase money mortgage" you qualify under non-recourse. Even after everything I read, I still went and saw a lawyer just to put my mind at ease. I hope this helps! I know it is a tough decision...my husband and I said the same things...we want to be able to allow our kids to do things and enjoy being kids, not have them stressed because mom and dad are stressed...not worth it!