GMAC - Foreclosure/Short Sale on Second Home! Help!

[gmac_daddy]

Hello-

First off thank you for this wonderful site! I have several questions I really need answers on. Thank you in advance.

Here is my story:
I bought a second home as a partial investment and partial getaway. I have a fixed rate mortgage with GMAC and work in the sales industry. My business has really taken a hit and therefore I can't make my second home payments anymore. I'm NOT late on any bills and have 750 FICO scores. A loan mod doesn't seem like the right answer for me as I really can't afford much of a payment at all on it at the moment. I've talked to a company that specializes in consulting home owners to foreclose. The second home is in Utah and I owe 415k on it. I had an appraisal done on it 10 months ago and it came in at 725k. Yah right - After looking at the competition for sale, there are 19 or so for sale that are identical and some are short selling for 305k and not sold! I'm upside down and can't afford my payment which I'm thinking I should just foreclose. The home would be a good investment for someone who could cover the payments for the next 3 years as it generates rental income (about 1k a month and increasing 20-30% a year). Basically I'm losing 2500 a month on this and it's killing me. I've sold all my not-needed items and don't go out to eat or buy coffee in the mornings. I've never thought it would come to this, but this home has become a nightmare and taking a toll on my family.

Here are my questions.
1. Are there such places that I could present this property to investors? I'd be willing to let an investor just take over payments and take all the future equity. I hear banks don't want to do deeds in leui but would this be a good case for one?

2. I was told if I foreclose there was a 99% chance GMAC would just send me a 1099 for their losses on whatever they sold rather than a judgement. Is this true?

3. I have other homes, businesses and personal assets I don't want them to touch so if a judgement is possible, should I sell these assets to family/friends to limit my liability? Remember I'm not even late on any payments yet.

4. I've considered hiring to help me through the process says they will send a cease and desist letter to GMAC telling them to not have creditors call me to try to collect. Then they send me weekly emails with updates and a timeline on when it will foreclose. They let me talk to their CPA and attorney for advice and have an advisor available anytime. Has anyone heard of these guys? Are they legit? They told me I'd be better off doing a foreclosure rather than a Short Sale because on a SS GMAC will want me to disclose my entire assets and personal finances of which they have more information on me to sue me for a judgement after the sell. They said if I just do a foreclosure GMAC wont sue me and just send me a 1099. They also said in Utah they only have 90 days after the foreclosure to come after me, is this true? How likely are they to sue me for the loss? They indicated that if I had a second (e.g. HELOC) the bank who owned the second would definately sue me since they have nothing to gain but I don't have a second so they think it's a pretty slam dunk. They mentioned in 4 years I can buy a home again and work on building my credit. What is your take on this?

5. Should I hire an attorney right now or wait and see if GMAC sues me? What can the attorney do to help me through this that this other company can't do?

6. Am I expected to pay the entire taxes due on the 1099 that year or is it possible to span it out several years to pay for the taxes? Is it possible GMAC won't come after me at all, or am I sure to get the 1099 or judement?

7. My last other idea I had was to fractionalize the property and find multiple buyers. It's fully furnished and is almost brand new. It's in the mountains and is really an unreal property. Has anyone had experience finding fractional owners and where do you market to these people?

Sorry about all the questions, I REALLY appreciate any help anybody can provide.

-Stressed & up all night

[Dan Bailey]

Welcome to the forum gmacdaddy, and thanks for joining.
I would be wary of any companies advertising things out there, there's alot of scams going on right now. By following the suggestions in this forum, you should be able to take care of what you need to do, except in the case of needing to hire a real attorney.
I'm sure ***, Moe, or Andrew -the moderators, wiull be by soon to answer your questions.
Good luck!

[Moe Bedard]

Hi gmac_daddy,

Welcome to the forum and thank you for joining...............

You would really need to consult with a foreclosure attorney in Utah for advice on the questions you have here.........they would know how to advise you best..........

Here is an excerpt from the Utah foreclosure law regarding how they handle deficiency..........

It is possible to obtain a deficiency judgment against the borrower for the difference between the amount the borrower owed on the original loan and the foreclosure sale price and the lender may be able to seize the property until the differing amount is paid.

[gmac_daddy]

I'm fine letting them seize the property, I just don't want them to touch my own home. I'll call an attorney I suppose. Can you direct me to anyone in Utah?

Thanks

[Moe Bedard]

What you would need to do is to find one using the Utah Bar Association referal...........

Utah State Bar - Lawyer Referral Service

[gmac_daddy]

FYI - I'm in Utah

I am 6 months behind on my HOA payment and got a letter saying they are sending me to collections. Can the HOA come after me personally or will they file a lien? If it's foreclosing, what do I care if they file a lien? I'm having a hard time with bills, but I don't want to get sued from the HOA and ruin my credit even more. Does this show up on my credit in addition to the foreclosure? I read my CC&R"s from my HOA and this is the words they used. I can't make sense of it!!

Subordination of Assessment Lien. The lien or claim against a Condominium for unpaid assessments or charges levied by the Management Committee pursuant to this Declaration shall be subordinate to a Mortgage affecting such Condominium. A Mortgagee who comes into possession of the Condominium pursuant to its Mortgage or a deed or assignment in lieu of foreclosure shall take the same free of such lien or claim for unpaid assessments or charges, but only to the extent of assessments or charges which accrue prior to the foreclosure of the Mortgage, exercise of a power of sale available thereunder, or deed or assignment in lieu of foreclosure (except for claims for a pro rata share of such prior assessments or charges resulting from a pro rata reallocation thereof to all Condominiums including the Condominium in which the Mortgagee is interested). No assessment, charge, lien, or claim which is described in the preceding sentence as being subordinate to a Mortgage or as not being a burden to a Mortgagee coming into possession pursuant to its Mortgage or a deed or assignment in lieu of foreclosure shall be collected or enforced against a Mortgagee, a successor in title to a Mortgagee, or the Condominium affected or previously affected by the Mortgage concerned (to the extent any such collection or enforcement would prejudice the interests of the Mortgagee or successor in title to the Mortgagee interested in Condominium).

Please help - Thanks in advance.

[Irish Gal]

Hey gmac daddy,

I'm not sure about Utah HOA laws, but in CA, HOAs can pursue homeowners for personal liability separate from foreclosure. They can chase homeowners like creditors, so the common theme has been for folks to ensure they pay their HOA dues until a foreclosure is complete. The bank will then be responsible for dues post foreclosure, anything before foreclosure is the homeowner's responsibility. Others will probably chime in with more posts on the subject. Good luck.