What happens to your mortgage if you take a loss?

[Sami]

It's looking like we might take a loss on our house, anywhere from $1,000 to $25,000. It's hard to tell, but I'm preparing for the worst.

If that happens, what are my options? Is there a way to roll that into a new mortgage? Finance it somehow? What happens? I'm scarrrrrred. :confused:

Do we pay the mortgage company back right away (shudder at the thought), or can we find alternatives?

[curlygurl]

Unless you are able to pay the difference at the time of closing, I don't think you can go forward with that sale without the mortgaging back being involved.
It is possible that the bank will agree to take a loss - but not likely if you have been making timely payments - since they are better off just keeping you as the owners. I would call them (bank) to discuss any options they be willing to consider.

[bluberry]

Sami, I was in a similar situation and took a $15k loss on the sale of my house. I had to bring a check for the difference to closing. :eek:

I financed it by taking a loan out on my 401k. They did charge me interest but the interest and the principal were deposited back into my account. Luckily, I was able to pay it all back within 10 months.

[amorey]

Unless you are able to pay the difference at the time of closing, I don't think you can go forward with that sale without the mortgaging back being involved.
It is possible that the bank will agree to take a loss - but not likely if you have been making timely payments - since they are better off just keeping you as the owners. I would call them (bank) to discuss any options they be willing to consider.

This happened to the parent's of one of DH's students. They had made an offer on a house, and the sale fell through because the sellers had 3 mortgages and couldn't come up with the cash to cover their loss. I just squeaked out of the sale of my last house with some equity, but I did look into it, and everyone said, "Just hope you don't have to bring a check to closing."

[Pineknot]

Sami,

I don't know too much about this, but I have heard of them before. I live in California and when the market takes a huge dive, you will hear of short sales.

I found a link giving some information on them. I hope this helps you a bit.

http://www.ehow.com/how_8132_short-sale.html

[SiValleySteph]

I live in California and when the market takes a huge dive, you will hear of short sales.


Do you think a huge dive is coming? If so, when are you predicting? :p

Need to know since we're considering buying! Always interested!

[laura]

Well we just closed today on our condo, so I expect the huge dive anytime now! :p