Working Just to pay two Interest Loans.

[thehooks]

OKay, large mistake three years ago. Took all my equity and put it into my inlaws house with every intention of selling my old house. My wife and I own 51% of the inlaws house. House is paid for but we owe them 125,000 - gave them 125,000 as a down payment. House is worth $575,000. We get the other 49% as inheritance. Sounds good so far BUT back to the huge mistake on the other house.

We owe 292,000 on the first and 75,000 to a different bank on the second. Had two rentors in there the past three years and they have beaten the house up. Even with rent we were losing money each month. Tried calling to see if we can get into a 30 year fixed rate and try to make it work. NO help, only if we are behind in our payments. The second said they would renogotiate the loan after the sale or when we fall behind. last month my rentors moved out in middle of night. House thrashed and now we are going to short sell - first listing is at 250,000.

Questions:

If I short sell or it forcloses can the bank come after the inlaws house since I am on the deed?

I have read many articles, since I am in an interest only loan, should I make the payments when my credit is going to take a hit anyway?

My wife has a small home based business and is not LLC, can they come after her business?

Not really worried about my credit and just tired of working 80 hours a week to keep a house that is falling every month in value and I have no way of locking in a fixed loan. So what can they do to me if I quit on the payments now while we are trying to short sell?

Can I deed in lieu of forclosure?

We live in Reno, NV.

Thanks for any help possible.

[Moe Bedard]

Welcome to Loan Safe!

If I short sell or it forcloses can the bank come after the inlaws house since I am on the deed?

Depends what state you are in and what kind of loans these are, purchase or refinance?

I have read many articles, since I am in an interest only loan, should I make the payments when my credit is going to take a hit anyway?

I am confused by the question. Do you mean that you are going to be late sooner rather than later and you might as well be late now, than later? If it was me, I would rather have $5k in my pocket and bad credit than $0 dollars and bad credit.

Sort sales are far and few in between. So your chances are maybe 10% in selling in this market.

My wife has a small home based business and is not LLC, can they come after her business?

This is legal advice, but an llc has what is called a corporate vale and it is very difficult to pierce that. That is why people form LLC'S.

Not really worried about my credit and just tired of working 80 hours a week to keep a house that is falling every month in value and I have no way of locking in a fixed loan. So what can they do to me if I quit on the payments now while we are trying to short sell?

With a 10% chance and 90% odds that you will lose all the money you pay and beat your self in the ground trying to keep this afloat when its pulling you down slowly but surely. Again, this is a judgment call, but one that I know I would play in my favor and not the houses (lender )

Can I deed in lieu of foreclosure?

Lenders require a home to be on the market 60 days Plus in most circumstances and if you have a 2nd, it is almost impossible to do this.

I hope this help and I made some sense. Getting a bit tired and need to get some rest. Maybe someone else will have some guidance, but there id no easy answer to your dilemma and it almost comes down to making a simple decision of having money and an exit plan. What is, is. There is not much we can all do to change the market. We can try and do what is right, but we must not sacrifice our health and families to do so.

Good luck and I truly wish you the best!

[thehooks]

Thanks for the quick response.

We live in Reno and from all the reading I am thinking that since I refinanced the house the bank can come after the house that I share with the inlaws. Does anyone know if that is true for sure?

Thanks for the great website, mind hurts from all the info that I have read.

Thehooks

Moe asked the questions but you didn't answer all of them. We need information to help. Please answer the following:

1. State were property is located (I suspect Nevada).
2. Loan balances on the first loan and the second loan.
3. Were these loans created at the time you bought the home?
4. Was the home purchased as a residence (where you were going to live) or as a rental?
5. Your estimate of the current fair market value of the home.

Daniel

[thehooks]

Originally Posted by ProfessorShays

Moe asked the questions but you didn't answer all of them. We need information to help. Please answer the following:

1. State were property is located (I suspect Nevada).
2. Loan balances on the first loan and the second loan.
3. Were these loans created at the time you bought the home?
4. Was the home purchased as a residence (where you were going to live) or as a rental?
5. Your estimate of the current fair market value of the home.

Daniel

You are correct, the state is Nevada. First Loan balance is 292,000 second 75,000.00
Both loans are refinances, first wth 1st National Bank second Chase (if I ever can do business with banks again, Chase will not be on the list). The house was purchased as a residence in 1996 but is has been rented since Sept. of 2005 when we had to move to parents to help family. Although I do not think the bank is aware of that. Current fair market value is 220,000. We have it listed at 250,000, with it automatically dropping in price 20,000 and then 10,000 in price over the next 4 weeks if there is no interest. Thanks for your advice.

Thanks for answering the questions. For those of you posting, it really helps if you provide details including answers to the questions posed in this thread.

My initial suggestion is that you click on the following link that is located on this site and provides a summary of the foreclosure laws in Nevada: Nevada Foreclosure Law

Assuming the facts are as you represent, you can expect the lender in second position to exercise collection actions as though they were an unsecured creditor if you fall behind on your loan (garnishments, attachments, etc.). Why? Well because from a factual standpoint they are unsecured given the amount owed on the first loan ($292K) is approximately $70,000 more than you indicate the property is worth ($220K).

Your situation makes a "deed in lieu" virtually impossible because of the two loans. The holder of the first loan isn't going to accept it because they would own the property subject to the second loan. The holder of the second loan isn't going to accept it because their ownership would be subject to the first loan and there would be no equity for them in the property.

As to your general question (involving an LLC), you need to seek the services of an attorney skilled in asset preservation. Frankly your situation is challenging at best and you need to look into hiring a lawyer as soon as possible.

Daniel

[thehooks]

Yikes, thanks for your help. Your site is a huge source of moral support, 4 teens and tweens in the house, helping out both sets of elderly parents...being in the sandwich generation really bites!! It helps a little to know that your not alone, navigating all of this is like being in a foriegn country without a translation book, thanks for being the book. Kate