Never wanted to be a landlord

[zelus70]

Hi,

Great forum!

Ok, in aug 05 I bought a condo in San Francisco. After a couple of years my wife (then girlfriend) thought we needed a bigger place (in Aug 07) What to do.? Ok, rent out the condo and buy a bigger place. Fine, San Francisco will always go up! Right? No. Hmm.

So now I have the condo rented.

I payed 408k for it in 05. I have an 80/20. Have NOT refinanced. It's a 5 yr arm. So got a couple yrs left on it.

Currently I get $2000 month rent. Mortgage hoa etc are 3k. So after tax breaks etc, I NEG around $600 a month. Also there's a real cool $230 "special assessment" I have to pay for the next 7yrs.
There are a few units in the building in foreclosure and/or short sales (my unit seems to be going for around $340k now?) in the building.

I've called boa a couple of times to see if they could modify my loan , but ony get to the "analyst" after being transferred many times and them saying , well, someone will call me back.

I don't see things getting any better as far as prices coming back to where I could get out, or just breaking even. Who nows when?!

Since I haven't refinanced, should I consider foreclosure? Would that be a bigger hit on my credit as a short sale?

Should I stop paying the 2nd, and try to get that eliminated? (I think I could deal with the payments then) and keep renting it?

And the big picture is We want to stay in our current house. If I did have to let the condo go into foreclosure that would probably screw up our chances of refinancing our current house?

We are able to get by each month, but it's really becoming harder and harder.

Thanks so much for your input. Looking forward to hearing from people in a similar situation as mine.

One more thing, what happens to that "special assesment" if I walked?

[The Professor]

Gotta love those HOA special assessments. There are likely to be more, given this economic downturn and the fact that most Covenants, Conditions, and Restrictions (CC&R's) here in California contain a specific subordination which results in those dues that accrue prior to the foreclosure sale on the first loan, to be extinguished as a lien on the condominium. So, as former owners don't pay their dues, and lose the property through foreclosure, if the HOA can't collect successfully from the former owners, they seek contribution from existing owners.

In these challenging economic times, care should be taken to limit outgo, particularly where recovery is not even on the horizon. Were I similarly situated, I would carefully analyze, from a business perspective, whether it made sense to continue paying the mortgage on the condo. The downside of course is the effect its foreclosure would have on your credit. Also of concern is whether the holder of the second loan could proceed based upon a deficiency. Here you should seek the advice of a lawyer skilled in real estate law and debt collection practice to see that the fact that the loan proceeds were utilized to purchase your residence qualifies you for non-recourse status for that loan under California Code of Civil Procedure Section 580b. Oh and if you elect to go the foreclosure route, it would be a good idea to continue to pay the HOA dues until the foreclosure is completed.

Take care,

Daniel

[zelus70]

I contacted a lawyer about doing a loan mod.(It was one of those mass mailers) He told me I need to be 60 days late for the bank to even consider it (right now I'm still current). And the fee would be between 3-7k depending on various factors. Does this seem reasonable? I really want to use a lawyer I can trust.

[Moe Bedard]

I would definately not trust anything that came in the mail from someone preying on the NOD public records list...........they are right up there with the ambulance chasers.

Why not speak to the attorneys that have been checked and authorized by LoanSafe and see what they are able to do and what the fee would be before making the decision whether or not this is something that you are not able to do on your own but instead with the help of an attorney............here is the link.
Safe Loan Modification Service | Home Mortgage | Protect Your Home & Mortgage With Loan Safe

[zelus70]

Hi,

I lived in a condo for just over 2 years. It's now a rental (1.5yrs) . Is it still covered by Mortgage Forgiveness Debt Relief Act ? This is in Ca

Thanks