What can I do

[parkd]

Sorry guys I first put this thread in the wrong forum so I am duplicating it over here. Sorry about that.

Hi all, my first post here. My situation: I bought this house in 2002 well below the peak and my town has gotten absolutely crushed in property values since then. We are down 70+% from peak and are currently at 1999 price levels. I am about 60-80k under water and the neighorhood has REALLY turned for the worse. Section 8 types and illegal alien day laborer floppers are setting up shop and living 10 to a house all around my development. I am starting to even fear for my safety here. I can't sell for what I owe but I make a good salary and can easily afford the house. The commute has gotten terrible in this area because of all the renters that moved in and are living 10 to a house. My neighbors gave me roaches, there is constant trash blowing around the neighborhood because the dumpsters are always overfilled and the condo association won't do anything about the situation. My condo dues are also going up by 45% in January and I am getting nothing for it other than my grass mowed which I could easily do myself in a townhouse. My health both mental and physical are being taxed over the stress. I just know I can't stay here much longer. My loans are 200k primary ARM that already reset and is currently at a lower rate than it was and a 24k HELOC. I don't care about EVER buying another house again. I just can't believe what happened to my once nice neighborhood right outside of D.C. What would you guys do and what would be the first steps you would take?

[lrprn]

Sorry guys I first put this thread in the wrong forum so I am duplicating it over here. Sorry about that.

I deleted your duplicate thread - problem solved

What would you guys do and what would be the first steps you would take?

Given the situation you describe, if you have only one mortgage, you really have two viable choices: (1) Quit making payments and allow your house to be foreclosed on by the lender; or (2) file Chapter 7 or Chapter13 bankruptcy (whichever you qualify for), and get out from under the house by surrendering it in the bankruptcy.

The advantage of filing bankruptcy is that it will wipe out everything you owe on the mortgage loan when you are discharged. Foreclosure wipes out nothing - you still owe everything you borrowed to the bank.

Now if you have a second, even a third mortgage on the house, then if you are able to file Ch 13, as long as what you owe on your first mortgage is less than the current value of your house, you can strip the second/third/etc. mortgages and owe only what you have remaining on the first mortgage.

However, given the deteriorating situation you are facing in your neighborhood, perhaps it's best to cut your losses and move on. Only you can make that decision. Please let us know what direction you decide to go, and best of luck to you whatever you decide to do.

[parkd]

I'm not really sure I follow what you are saying? I am under water so what I owe on my first is not below what I could sell it for. If it was then I wouldn't be in this position! I do have a $24k 2nd which is the HELOC which is what I said in my first post...

How do they take into effect whether or not you can file ch 13? Since I am 80k under water on the house do they take that into effect as debts that I can't repay? I also really do not want to pay the bank a penny more for this house under some stupid repayment plan unless it is pennies on the dollar. They are the reason this neighborhood is so crappy anyway because they lent to morons that could never pay them back, many of whom were illegal aliens or their ilk. Under moral code I can NOT pay them back just for that.

[willsurvive]

What are your other debts? If you feel like you are in the position to file bankruptcy with a mountain of other debts, then I would personally file bankruptcy and let the house go during bankruptcy. If not, foreclosure is an option, but then the bank could come after you for the difference in the debt when they sell it. But then, later on you could file bankruptcy on that debt anyway.

Remember, just because you let the house go during bankruptcy, it does not mean move out instantly. You could go up to a year or more with no payments while the bank is foreclosing. Who is your mortgage through?

I think the big picture here is that first you need to decide your game plan. Is living there worth the stress in your life? Can you stand another year there or so (rent free if you file bankruptcy?). If not, then cut your losses and move on. But again, just because you decide to file or foreclose does not mean move the next day (if you don't want to). You will have plenty of time while the bank forecloses, or if you file bankruptcy, even longer.

[lrprn]

I'm not really sure I follow what you are saying? I am under water so what I owe on my first is not below what I could sell it for.

As Cool Hand Luke would say, "What we have here is a failure to communicate"

If your house is 'under water', that means that it's worth less than the remaining loan value. Are you saying that the house is worth more than your first mortgage? Let's try this....what is your house worth in today's market? How much do you owe on your first mortgage and any other mortgages on the home?

How do they take into effect whether or not you can file ch 13?

If your lawyer completes the Means Test and Schedules and you show more than about $160/month in disposable income, then you have enough to support a Ch 13 plan and can file Ch 13.

If you are still unclear, keep asking questions - we'll sort things out.

[NewLifeAhead]

Sorry guys I first put this thread in the wrong forum so I am duplicating it over here. Sorry about that.

Hi all, my first post here. My situation: I bought this house in 2002 well below the peak and my town has gotten absolutely crushed in property values since then. We are down 70+% from peak and are currently at 1999 price levels. I am about 60-80k under water and the neighorhood has REALLY turned for the worse. Section 8 types and illegal alien day laborer floppers are setting up shop and living 10 to a house all around my development. I am starting to even fear for my safety here. I can't sell for what I owe but I make a good salary and can easily afford the house. The commute has gotten terrible in this area because of all the renters that moved in and are living 10 to a house. My neighbors gave me roaches, there is constant trash blowing around the neighborhood because the dumpsters are always overfilled and the condo association won't do anything about the situation. My condo dues are also going up by 45% in January and I am getting nothing for it other than my grass mowed which I could easily do myself in a townhouse. My health both mental and physical are being taxed over the stress. I just know I can't stay here much longer. My loans are 200k primary ARM that already reset and is currently at a lower rate than it was and a 24k HELOC. I don't care about EVER buying another house again. I just can't believe what happened to my once nice neighborhood right outside of D.C. What would you guys do and what would be the first steps you would take?

LRPRN... I think PARKD got confused from your first response where you ask if there was only one mortgage when it was stated there was a mortgage (200k) and a HELOC (24k). It was also stated by the OP that they are 60-80k under water.

parkd... Do you have other unsecured debts to discharge if you file? As the others have said , it will come down to your monthly disposable income, if it's to high you will have to file ch 13. Being 80k under water on a secured debt doesn't have a bearing on which chapter you can file (7 or 13). It's the disposable income that decides which chapter. If you do file chapter 13, then your HELOC can be declared as unsecured debt (this lien will be stripped) as your house value is less the your first mortgage. From your comment "I can't sell for what I owe but I make a good salary and can easily afford the house", it sounds like you will have disposable income. Fill out the means test (there are posts here on how to do that) to compare your income with your expenses and this will give a better picture of what options are available to you.

I hope it works out well for you and keep asking questions, there are lots of well informed folks on here to help you out.