Any guidence.....

[nana8]

My boyfriend and I are in trouble.....looking for some input from those of you "in th know"
I'll try to keep this brief:
He ownes 2 houses...the one we live in has a balance of $133,000...it is worth around $80,000,as home prices in our area of Illinois have plummetted...our mortgage payment with CW is $1486/mo.....way toooo much. The other house has a balance which is about the same as it is worth, the pymt....also thru CW....is $1,200/mo. This second house is where his x-wife and 11 year old daughter live.
We cannot keep paying $2,700/mo. it is now much more than we can afford.
We own a semi.....hence the mortgage on the second house. Businness has been tough and we are bearly surviving.
I own a condo that I recently inherited when my dad passed away that we could live in ...it has no mortgage. If at all possible we would like to keep a roof over his daughter's head, we can afford that one mortgage...just not both.
What would be the ramifications to the second house if we foreclosed on the first? The hit to credit is the least of our worries.
Any input would be greatly appreciated.
Okay....maybe not so brief, but I feel kinda lost. I do have to say that it is comforting...in a wierd way....that we are not alone.

[The Professor]

I am going to start the discussion by pointing to the fact that what we have is two separate financial situations. Your situation and his situation. His is what I'll agree is "in trouble." Your situation doesn't appear to be. So, what I want you to do is to break the situation into two situations, providing as much detail about the property he owns, separate from the property you own.

Once you've done that I'll be happy to respond with what suggestions I can come up with.

Daniel

[nana8]

Professor Shays-
You are correct, seeing as we are not yet married HE is the one in trouble. My condo is paid off-only need to keep up with HOA dues and property taxes, I am financially okay at the moment.
He, on the other hand is not.
He owes $133,000 on the primary residense, it is presently worth around $80,000.
He owes $ 135,000 on the other house that his x-wife and daughter live in, presently worth approximately $120-130,000.
He ownes his own business-trucking....which took a big hit last year. It's almost funny that the business he works in...hauling fuel...very nearly drove him out of business.
If we let the primary residence foreclose, can that have an effect on the other house. Each house has only one mortgage and CW is the lender on both.
Thank you for your time.....I'm not very well versed on the ins and outs of foreclosure yet, but reading what other people are saying has been very informative

[The Professor]

Unless the two loans are "cross-collateralized" the foreclosure of one property shouldn't effect the other. I would find it extremely unusual for this "cross-collateralization" to exist.

As to the primary residence, your primary concern should be if the home is foreclosed will the lender come after your boyfriend for a deficiency (difference in the loan amount and what the lender is able to recover when it disposes of the property). It is hard to get a straight answer on this when doing a little Internet research. The answer seems to be that while obtaining a deficiency is possible, it is rarely done given the economic condition in Michigan and the chances of ultimate recovery being not that good.

My advice is keep your financial independence. I know that is a challenge given relationships, but here it is sound advice in my opinion.

Daniel

[nana8]

Daniel-
Thanks- that makes me feel better. I am and will remain financially independant. I was just worried about keeping a roof over his daughter's head.
As for them obtaining a deficiency....they can't get blood from a turnip
Thanks again-Julie