Thanks for any advice/help you can give. I Purchased a condo as an investment property in California in 2005 for 360,000K. It was purchased with a 288K (Wells Fargo) interest only loan and the remainder on an interest only HELOC (Chase) on my first residence.
I have not refinanced either loan I used to buy the condo. I feel fortunate that I have good tenants now but I am still losing money as the rent does not cover all of the mortgages, HOA fees, expenses and taxes. The property is presently worth well under $200K and I don't see the point in keeping this property as it will be decades until its worth what I purchased it for and I will be losing money every year I keep it up to then. I had a brief consultation with a lawyer (he didn't examine any documents of mine) who suggested a strategic default on the Wells Fargo Loan and continue to collect rent for a few months before the bank takes the property back. The lawyer advised me that WF cannot come after the home I live in because the loan I used was purchase money for the investment property. He went on to tell me that I will be responsible to pay the HELOC loan because it is secured with the home I live in now and that I should continue to pay the HOA fees and insurance until the bank takes over. He said I don't need to pay the real property tax, and first mortgage.
Does this sound like good advice? My two biggest concerns are that WF comes after the home I live in (it has a good amount of equity) and the hassle the collectors will give me during the foreclosure. I have a young family and would rather they not have to go through the harassment of bill collectors.