Home Loans and Support

Construction Loan Foreclosure

Discussion in 'Stop Foreclosure and Tell Us Your Story' started by hockeymom7, Sep 15, 2009.

  1. hockeymom7

    hockeymom7 LoanSafe Member

    We are totally frazzled and no one seems to be able to offer any assistance. We took out a construction loan in Jan 2007 and undertook construction of our family dream home. Our youngest is very challenged to much of the home is designed especially for his needs. Well the contractor was an idiot and the entire construction took 24 months instead of the anticipated 14. During the course of construction the mortgage market crumbled and wife lost her job. So now we have a fabulous home that we haven't been able to live in because we don't have permanent financing; can't get permanent financing due to change in qualification requirements - lack of stated income loans - and the construction lender will not grant any further extensions and has filed a NOD. :eek: The property is worth way more than the amount owed on the construction loan. Everyone says our only option is to sell before the bank takes it back and sells it themselves. If that happens we also lose $200k they made us put up as additional collateral for one of the extensions of the construction loan [which they only granted for three months] Do we have any other options or must we truly lose our investment and our family's dream home built for our handicapped child?????? Can anyone help????
  2. flagirl4444

    flagirl4444 LoanSafe Member

    I replied in your other post, but I'll say it here too. Sell that house ASAP while you still have equity! Take the money and put it toward building or renovating another (more affordable) home to accommodate your son. Even if you could get another loan, would you realistically be able to afford the mortgage payment long term? Wouldn't it be worse to get a loan, move into the house, and end up losing it a year or two later when values may be even lower and you could end up with nothing? Every day that you wait to sell the house is costing you money in interest on that construction loan. The interest and late fees will pile up onto the total loan amount, which means you will net less from the sale, and that's less money you will have for another home. Please don't wait around and let them foreclose, you would lose a lot more by doing that and wouldn't be eligible for another mortgage for several years after a foreclosure. You need to act fast because in this market it could take months to sell and they could foreclose before then. Price it to sell fast, take the money and start over. Good luck!

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