So my wife and I have been trying to sell our condo in Chicago for 18 months to no avail. We’re on our second Realtor. The mortgage is only in my name, as I bought it before we married.
We now live in the Detroit area (renting until we unload the condo) and are anxious to buy a home here.
Since we first listed our property, we’ve reduced the price over $35,000. Plus, right now we’re listed $10000 below what I paid for it, and are listed below what I actually owe on it.
It’s been sitting vacant for a looooong time, and we’re paying out appx. $1,800/mo for this place-- pissing that money away basically. At this point, if it were to sell, we’d wipe out our entire savings at closing (paying out the difference in what we owe, closing costs, commission, taxes, etc.)
Or.
We walk away, take our savings and buy a home solely in my wife’s name (she makes good money and has pristine credit). I would gladly accept the black mark on my credit as a way to end this cash hemorrhage ($32,000 and counting…)
My questions:
I understand that it’s possible to have a mortgage in only one spouse’s name, but yet have both names on the title. True?
Are there other reasonable options for us? What is selling short? How about deed in lieu of foreclosure?
Assuming my wife and I do not ever divorce, does walking away make good financial sense? Especially since we can buy a house (a long-term residence) in an incredible buyers market in suburban Detroit?
I mean, selling our condo at this point wipes us out financially, and it would take another year or so for us to re-build our savings. It just seems, looking at it as a business decision, we’re better off cutting all ties to this condo asap.
I agree with this. Why are you letting it sit vacant when you won’t be able to sell for a profit? If you rent it out, you should be able to at least break even for a while until the market improves.
I understand that it’s possible to have a mortgage in only one spouse’s name, but yet have both names on the title. True? My wife and I have this arrangement, her name is only on the mortgage, both are names are on the title. We had a lawyer prepare it for us, as well as an attendant contract between us detailing cases such as death or divorce.
As far as I know, this is automatic in Michigan because you’re married. That is, I bought our house on my good credit only, and jumped through no special hoops to ensure that my wife’s name appears on the deed and property tax records.
Perhaps you can both purchase the new house in Michigan using both your credit before you abandon the other one. That way, if you’re foreclosed upon, at least you still have something positive being reported.
You’re considering walking away from the mortgage (zero dollar return and a credit record black mark) and what ever you would have been getting for rent isn’t enough? The hassle of defaulting on a loan is less then the hassle of working with a renter?
Also, will your saving actually be safe? I don’t know anything about that, but is there any chance the bank can go after your savings, since you are telling them you don’t have enough to repay the money you owe.
Yes. By selling it, we’d be very deep in the red; we passed the zero-dollar return mark a year ago. By walking away, we stop hemorrhaging money. By renting it, we’re deep in the red, still hemorrhaging money, still dealing with property taxes (which would now go up since it’s now non-homestead), having to deal (long-distance) with any problems that might arise with the property, etc. By walking away, we’re not.
I’ll take a black mark on my credit for 7-10 years just to be done with this. Anything I might need credit for, my wife can sign, or in her absence, I’ve got plenty of family who would co-sign.
With deed in lieu of foreclosure or short selling, I don’t think they can go after it. But that’s why I opened this thread, to ask such things.
I work in the residential rental business in Chicago, so I’d be able to tell you what a fair market rental value would be. What’s the address of the property?
Possible, yes. Likely, depends on the state and some other factors. In Michigan, jointly owned marital property is held as tenancy by the entireties. http://www.thinkglink.com/Tenants_By_The_Entireties.htm Having both spouses on the deed will be problematic. Because Michigan recognizes dower rights for women http://www.legislature.mi.gov/(S(0hsa30au033th245pu1app45))/mileg.aspx?page=GetMCLDocument&objectname=mcl-558-1 , but not curtesy rights for men, it’s possible for a married woman to buy property in her own name and get a mortgage on it in her own name.
Selling short is a selling the property for less than the mortgage balance. You need the mortgagee’s consent to do this. Deed in lieu is conveying the property back to the mortgagee, thereby saving the mortgagee the cost of foreclosure. Both will damage your credit.
I think you are right. Do you know that your Lender would agree to do either of these - you need them to be on-board but you seem savvy enough to know this … If so, they will do either/or that might be the best you can hope for in this situation.
You know, I bet, that Michigan is a recourse state and on a straight up walk away they *can *try to grab up your savings and/or sue you for the difference between the (eventual) sale of the property and what you owe - I bet you knew that too though … Would they? depends on alot things such as : how much you owe and how much they get & how much in the red the bank is overall
