After watching our house not sell for 3 months (with one offer that would require us to bring 40k to the table!), we think it might be time for more creative solutions.
Tell me about
(previous AskMe: underwater-mortgage help-me-default
(usual disclaimers: you aren't my lawyer, tax professional, doctor, or paranormal investigator. If I need a pro, please tell me what kind and specialty! Specific recommendations welcome.)
1. How do you actually execute a strategic default
- a. Does one tell the bank? Or does that tip their hand?
- b. Any good benefit to (not) continuing payment on the mortgage?
- c. The internet claims that MN has protections on assets around foreclosure. Can the bank sue us for the difference when they sell it? (magic words: non-recourse)
- d. Will our mortgage at our new house be affected? Our other existing lines of credit (credit cards)?
- e. We both have good credit (780+), and are willing to trade reputation for cash here, if it's a good deal. 40k for 100 points seems like a good trade. Is 100 points a good estimate?
2. Other ideas
? We've considered:
: ("accidental landlord"). In Minneapolis, this seems hard, given the $750 or $1000 property inspection fee
Also, we would prefer not to be landlords!
b. selling for "contract for deed"
? It sounded like a good idea on first hearing, but the internet finds it creepy.
c. New realtor
? If so, how do we get out of our current contract?
d. Short sale
? (Same questions as with default)
(we are in a not-touristy area, and would need 6-10 stays per month to make it profitable).
f. (some wonderful other solution, that allows us to turn this into money, or wait out the dead market a year or two)
- Minneapolis, Minnesota, United States
- We are current on payments.
- house is on the market for sale.
- house is in sellable (very good) condition, 5br, 2.5ba.
- 280s purchase, 269 owed, 1 offer at 235.
- already have new mortgage on new house.
- no new loans to be applied for in the new few years. (New house already bought.)
- can swing payments for a while (low fixed mortgage).
4. Out of scope
- morality of walking away. I think that's well covered: previously on the blue
. The bank made a bet on my house going up in value faster enough to secure the loan. It was a bad bet.