I'm a small business owner in NJ. Husband and I bought a condo in 2005 -- mortgage in my name only because I had a better credit score at the time. Bought our current home in 2008 with plans to sell the condo, but then the market dropped and we were suddenly underwater. Rented it out at a loss for a couple of years, then could no longer afford even that (bad economy wrecked our business) -- so we stopped making payments and started trying to short sell. Our first short sale offer was approved, but buyer lost his job right before closing. Second offer, buyer lost job again. Third offer walked because the bank was taking too long. Fourth offer (offers now down about $100K, along with home value) was rejected by our servicer -- Seterus -- because their appraisal was higher than our real estate agent's comps. So now we are applying for Deed in Lieu.
First: 317,429Second: 40,903
Market Value: 235,000
Seterus will not proceed with DIL unless Second (HELOC) agrees to 6%. Second is asking for an additional $15,000, which we don't have at the moment.
At this point, I am really wishing I had just let the bank foreclose in the first place, instead of trying to ss. I thought it was the right thing to do, but realize I would be in a better situation now if the foreclosure was over and done with.
Although condo was our primary residence for 3 years, it is now considered investment property -- so we don't qualify for most of the government mod programs, or even the limit on deficiency judgements under NJ law (as I understand it).
We have sent servicer mountains of paperwork at this point, so they know that our small business is slowly recovering -- and also that we have are now slightly over the income limit to file Chapter 7. I know deficiency judgements are uncommon in NJ, but I am afraid I might start a trend!
What would you do in this situation? We don't really have the discretionary income to start making payments again... but we might soon (depending on how the economy and our business goes). Is it even possible to refinance with 3years of no payments?
Ideally, I would like to complete the Deed in Lieu, but I don't know how to get the 2nd to agree.
Would love to hear anyone's thoughts!