In May 2007 I bought my house in Baltimore, MD (a recourse state). It was about all I could afford in a half way decent neighborhood. And it needed lots of work.
* Original Appraisal: $177,500
* Purchase Price: $172,000
* Mortages 75/25 (currently $124k @ 6.5%/40k @ 9%) both with Wells Fargo (my STB exwife is not on the mortgage)
* Zillow thinks my home is worth $177,500; but a nearby home (in better condition) that Zillow estimated at $184,500 just sold for $129,900 (a possible foreclosure). Maybe my house could sell for $100k? Maybe less?
* For the time being, at least, my credit score is in the 780 range.
Necessary repairs: New front porch, New back deck, New Roof, Carpeting, and drywall work. The kitchen really should be redone. A short sale realtor I talked to was less than enthused by the property and said it was close to unsellable in this market. I figure I need to put at least $30,000 (that I don't have) into it to bring it up to sellable condition.
As a newly single guy, I don't want the house. I don't want anything to do with this house anymore. I can't afford the house. Apparently, I can't sell the house. It's like a chain around my neck, and walking away is looking mighty appealing right now.
Contributing headache: A couple of years ago I bought a rental property with an LLC (using a 401k loan), that I rehabbed using credit cards. Then the credit crunch happened and I couldn't refinance it into a regular loan. Then the tenants (and two property managers) went deadbeat. Then my wife left and I stopped caring and the property has been sitting abandoned (I hope ... who knows what squatters could be there, and what damage they could have done) ever since.
Now, my 401k loan payment is killing me (at over $1000/mo), my credit card payments are killing me (minimum payments around $1200/mo), my bank account is down to triple digits, my lawyer wants cash (another kilo-buck this month and next), my house needs some immediate mechanical attention, my truck has just turned a 1/4 million miles and has me nervous, the monster overtime I've been working to hide from my troubles is affecting my health, and I need to get off my behind and get something done.
IF (BIG if) I can sell my rental quickly (Zillow says $105k ... I don't believe it) and clear $60k, I can clear my 401k loan and most of my credit card debt, and I could once again afford my mortgage (but probably not repairs). But with the failure of my marriage, I do not want to keep my house. I don't even want to remain in Baltimore. I'm thinking of upgrading to a somewhat larger sailboat, and moving onboard that (it should be cheaper than an apartment and is the lifestyle I desire).
I'm scared silly. But things can't keep going as they are. I'm looking to clean up my financial hell in the cleanest way possible. I don't care if I can't buy a house for 5 years. Or 7. Or ever. I'm completely soured on the concept of long term debt and will likely never buy a house again.
I'm not sure if I have any questions, or if I just wanted to let loose in a forum where I was unlikely to get any lectures on financial morality. I would sure be interested in hearing how the process of walking away worked for other people in Maryland. And I would sure be interested if someone could point me in the direction of a financial professional (that won't bankrupt me himself) to help me plan my way out of this mess.