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ProudLSUMom 
LSU Fan
Baton Rouge
Member since Sep 2007
2302 posts
| mortgage help for daughter (Posted on 10/10/12 at 3:57 pm)
Long story short:
Daughter bought condo Jan 2009
Paid $124k
Now worth $85k
Owes $117k (I think)
5% interest rate
Developer went belly up just after she purchased
Can't sell (other owners have tried)
Condo assoc. has no money
Building needs exterior repairs
Break-ins have occurred (she has been spared so far)
We want to help her out. What would you do in this situation?
It seems refinancing wouldn't work since she is upside down. Please correct me if I'm wrong.
We are thinking of renting the condo and buying a home in a better neighborhood and renting it to her.
We have also considered telling her to walk away.
We are hesitant to rent it because there have been sewer backups (another issue due to modad being removed because developer didn't pay for it). It seems like a headache waiting to happen.
Any suggestions?
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Golfer
LSU Fan
Coral Bay, St. John, USVI
Member since Nov 2005
48190 posts
 Online
| re: mortgage help for daughter (Posted on 10/10/12 at 4:01 pm to ProudLSUMom)
FHA Streamline if the original loan was an FHA
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rmc
LSU Fan
Zachary, LA
Member since Sep 2004
21215 posts
| re: mortgage help for daughter (Posted on 10/10/12 at 4:08 pm to ProudLSUMom)
quote:
We have also considered telling her to walk away.
If she can do this and sign it back over to the Bank w/ no recourse, I'd do it in a heartbeat. The thing is, the Bank probably will not consider doing that unless she defaults first.
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I Love Bama 
Alabama Fan
Alabama
Member since Nov 2007
27968 posts
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| re: mortgage help for daughter (Posted on 10/10/12 at 4:12 pm to ProudLSUMom)
tell her to walk away
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WikiTiger
LSU Fan
Member since Sep 2007
38604 posts
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| re: mortgage help for daughter (Posted on 10/10/12 at 4:30 pm to ProudLSUMom)
quote:
We have also considered telling her to walk away.
That's what I would do.
Sounds like you are in a position to help her out with her living arrangements after that.
The foreclosure will only hurt her credit for a short period of time anyway (something like max 7 years or so - someone correct me if I'm wrong).
This post was edited on 10/10 at 4:31 pm
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ProudLSUMom
LSU Fan
Baton Rouge
Member since Sep 2007
2302 posts
| re: mortgage help for daughter (Posted on 10/10/12 at 5:20 pm to ProudLSUMom)
She could be eligible for the streamline since it is an FHA loan.
She owes $114k.
I will get her to do the math to see what her lower payments could possibly be.
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MikeBRLA
LSU Fan
Baton Rouge
Member since Jun 2005
8743 posts
| re: mortgage help for daughter (Posted on 10/10/12 at 5:45 pm to ProudLSUMom)
quote:
Now worth $85k
quote:
Can't sell (other owners have tried)
If they aren't selling, then how do you know it's worth $85k?
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ProudLSUMom
LSU Fan
Baton Rouge
Member since Sep 2007
2302 posts
| re: mortgage help for daughter (Posted on 10/10/12 at 5:48 pm to MikeBRLA)
quote:
If they aren't selling, then how do you know it's worth $85k?
2 owners have had appraisals (I guess they were refinancing) and that was the number.
Also, I don't think anyone could get financing since the condo owners assoc. is suing a bank and the association is being sued by State Farm. I also think the renter to owner occupied ratio is not good for lenders.
This post was edited on 10/10 at 5:58 pm
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CoolHand 
USA Fan
Member since Dec 2011
1457 posts
| re: mortgage help for daughter (Posted on 10/10/12 at 10:15 pm to ProudLSUMom)
You must be proud.
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El Josey Wales
LSU Fan
Greater Geismar
Member since Nov 2007
19540 posts
| re: mortgage help for daughter (Posted on 10/10/12 at 11:32 pm to CoolHand)
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Gujam8
Member since Jun 2010
2361 posts
| re: mortgage help for daughter (Posted on 10/11/12 at 12:40 am to ProudLSUMom)
Walk away.
Not worth it.
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yellowfin 
Illinois Fan
Paige is Pretty
Member since May 2006
53094 posts
Online
| re: mortgage help for daughter (Posted on 10/11/12 at 7:10 am to ProudLSUMom)
Walk away
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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
4821 posts
Online
| re: mortgage help for daughter (Posted on 10/11/12 at 7:50 am to ProudLSUMom)
If she walks away, it will be 6-12 months easily before she is forced out, maybe longer. At that rate, I'm guessing its about a $800 a month mortgage/HOA. So 12 months x $800 = $9600.
Once this low rate market runs its course, I imagine the gov't will do a walk away forgiveness program to encourage/allow buyers back into market at the more traditional interest rates historically., but it'll be 20% down or greater to qualify. That's where that $9600 may come in handy. BICBW
If it helps, I have a client bringing 50k to the table this week to closing. Bought 330k, sold 283k. And 283k is $3 higher per sq. ft. over any comp on market. So your daughter is in a crowded boat
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Catman88
LSU Fan
Baton Rouge, LA
Member since Dec 2004
36750 posts
| re: mortgage help for daughter (Posted on 10/11/12 at 8:11 am to ProudLSUMom)
quote:
(another issue due to modad being removed because developer didn't pay for it)
So why dont the owners of these condos split the pay to have one installed? It would benefit all and raise the values.
Without one Im not sure how their sewage is working at all. Is this outside a city limits?
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ProudLSUMom
LSU Fan
Baton Rouge
Member since Sep 2007
2302 posts
| re: mortgage help for daughter (Posted on 10/11/12 at 8:14 am to ItNeverRains)
quote:
If she walks away, it will be 6-12 months easily before she is forced out, maybe longer. At that rate, I'm guessing its about a $800 a month mortgage/HOA. So 12 months x $800 = $9600.
Once this low rate market runs its course, I imagine the gov't will do a walk away forgiveness program to encourage/allow buyers back into market at the more traditional interest rates historically., but it'll be 20% down or greater to qualify. That's where that $9600 may come in handy. BICBW
If it helps, I have a client bringing 50k to the table this week to closing. Bought 330k, sold 283k. And 283k is $3 higher per sq. ft. over any comp on market. So your daughter is in a crowded boat
Yes, you are close on her payments. I'm not sure what BICBW means. Can you tell me?
We are leaning towards renting the condo right now.
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guttata
LSU Fan
prairieville
Member since Feb 2006
18348 posts
| re: mortgage help for daughter (Posted on 10/11/12 at 8:17 am to ProudLSUMom)
Tell her walk away and find a guy that makes alot of money so they won't have to depend on her credit to get another house.
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ProudLSUMom
LSU Fan
Baton Rouge
Member since Sep 2007
2302 posts
| re: mortgage help for daughter (Posted on 10/11/12 at 8:19 am to Catman88)
quote:
So why dont the owners of these condos split the pay to have one installed? It would benefit all and raise the values.
Without one Im not sure how their sewage is working at all. Is this outside a city limits?
Yes, it is outside of city limits. I'm not sure how it is working either.
I don't know if the owners have discussed buying their own modad. They have difficulty collecting $125 monthly dues from owners, I don't know how they would be able to collect special assessments.
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ProudLSUMom
LSU Fan
Baton Rouge
Member since Sep 2007
2302 posts
| re: mortgage help for daughter (Posted on 10/11/12 at 8:19 am to guttata)
quote:
Tell her walk away and find a guy that makes alot of money so they won't have to depend on her credit to get another house.
She would kill me if I told her that!
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AngryBeavers
LSU Fan
Member since Jun 2012
1724 posts
Online
| re: mortgage help for daughter (Posted on 10/11/12 at 8:23 am to ProudLSUMom)
If she can pay the note she signed on for then IMO walking away is wrong. I would try renting first before walking away from an obligation.
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ZereauxSum
LSU Fan
Atlanta, GA
Member since Nov 2008
5921 posts
| re: mortgage help for daughter (Posted on 10/11/12 at 8:31 am to ProudLSUMom)
I think it's time for your daughter to bail. The community seems to be a fail, so even if she could keep up the payments somehow is it even worth it?
I would advise here to default (stop paying) and try to work with the bank and do a short sale. There is a market price for every dwelling. It could be the case that others in her community are being unrealistic. If she prices it right she'll get offers. The bank might not find them palatable, but at least she can say she tried, and it will give her more time with no housing expenses.
It will obliterate her credit (just did a short sale earlier in the year) but she's young so she'll be fine.
This post was edited on 10/11 at 8:33 am
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