Property Value: $115,000??? See explanation below
1st Lender: PFCU
1st Loan Balance: $98,000
Purchase money? Yes____ No_X___
2nd Lender: US Bank
2nd Loan Balance: $63,000
Purchase Money? Yes____ No_X___
It is a house we moved out of after building another. Been vacant and on market for three years. The house is now in a state of disrepair. A leak of the chimney crown has caused moisture in the crawlspace. This has caused the solid hardwood floors to buckle and mold to grow in the crawlspace. The sill plate has rotted in one area and will have to be replaced.
If there were no problems the value per CMA would maybe be $135,000 to $140,000. With these issues I am guessing $115,000.
I am contemplating one of two things:
1. Fill out the paperwork to send in to US Bank requesting that they consider a short sale.
2. The second option I am thinking of is stopping payments on the 2nd with US Bank and settling that debt. Then selling the house for just enough to cover the first mortgage.
What is everyone's thoughts? Is it a problem if I try option one first and see where that goes? If that doesn't work out and I move to option two, is it a big deal that will have my current financial info when it comes time to settle?
Will US Bank pursue foreclosure since they may have some equity? That is one reason I am thinking of taking option one first so they will know from the hardship letter the property is now in disrepair.
Thanks so much for any help you guys can provide