We currently have a mobile home in a park that has been listed for quite some time and has not sold. We have bought and are living in a different home and currently are making the 2 mortgage payments, insurance, and the lot rent on the mobile home. We are barely squeaking by, and now have winter taxes on our newer home and need to get out of the mobile home mortgage and lot rent in order to pay the taxes. We've considered voluntary repossession, is this a viable option?
Do you have any other ideas?
voluntary repossession
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Mac
Re: voluntary repossession
Not if you want to maintain your credit rating, other than selling your new house, moving back into the old one, and going through the process differently - sell the MH first, move into an apartment, then buy the next house?
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Deann
Re: voluntary repossession
I am in the same boat you are. My opinion is this. If the house you are in now already has the mortgage done (approved and living in), if you will not need a new car in the next 24 months, then do it. If you already have a good (700's) credit score this will not hurt you as bad as you think. We are considering doing this our selves. With our scores being in the upper 700's I was told it might take 30 -60 points off. Since you will be making payments on your new house, as long as they are on time every month, you will be building your credit again right from the start. It is just that initial drop which will hurt you. If you already have fair to poor credit I would suggest dropping the price and taking as much of a loss as you can with out going the repo route.
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rmurray
Re: voluntary repossession
You better get better advice...A foreclosure will take many more points off your credit numbers than you suggest..
ALSO...understand the lenders rights and potential liability you will have in the future..
1)...The lender will sell the home for the best price they can get in a short period of time..usually sold by sealed bids..losses can be VERY large and you are still obligated for this money..PLUS..any additional costs incurred by the lender..I have actually seen homes with $20000 balances sold and the losses be more than 20K...
2)..After the sale the lender has a number of recourses that they can take..
a)..they WILL file the info with the credit folks...this will effect your future credit possibilities...but it also effect the price you pay on current credit cards (often low rate cards raise rates when adverse credit shows up)..auto, life, health and homeowners insurance use credit score when deciding to insure and at what price..
b)..they have the right to try to collect the outstanding balance..
c)..they can and many will..sue you and take a judgement..this will place a lien on the new home you have..some states judgments are only good for ten years..but can be renewed for another 10..some state judgments stay forever (SC is one of these)..In some state they can garnishee wages..take bank accounts..take any asset but your home..but the lien will be there and need to be satisfied prior to the sale..
d)..OR they can sell your debt for a few dollars to those who specialize in collection..these folks are much more aggressive and have all the rights of the first lender...
f)..OR they can write off the debt as uncollectable...when they do they have to send the IRS a 1099 for the income on you..you will incur a tax obligation as if you made this amount in income..Most likely you will not know about it for a few years until the IRS catches up..You will them get a bill for the taxes, penalties and interest that will total about 1/2 of the banks loss..
Long before you have a repossession (voluntary or otherwise)..you better get good legal advise in your state and find out ALL the possible future ramifications..
ALSO...understand the lenders rights and potential liability you will have in the future..
1)...The lender will sell the home for the best price they can get in a short period of time..usually sold by sealed bids..losses can be VERY large and you are still obligated for this money..PLUS..any additional costs incurred by the lender..I have actually seen homes with $20000 balances sold and the losses be more than 20K...
2)..After the sale the lender has a number of recourses that they can take..
a)..they WILL file the info with the credit folks...this will effect your future credit possibilities...but it also effect the price you pay on current credit cards (often low rate cards raise rates when adverse credit shows up)..auto, life, health and homeowners insurance use credit score when deciding to insure and at what price..
b)..they have the right to try to collect the outstanding balance..
c)..they can and many will..sue you and take a judgement..this will place a lien on the new home you have..some states judgments are only good for ten years..but can be renewed for another 10..some state judgments stay forever (SC is one of these)..In some state they can garnishee wages..take bank accounts..take any asset but your home..but the lien will be there and need to be satisfied prior to the sale..
d)..OR they can sell your debt for a few dollars to those who specialize in collection..these folks are much more aggressive and have all the rights of the first lender...
f)..OR they can write off the debt as uncollectable...when they do they have to send the IRS a 1099 for the income on you..you will incur a tax obligation as if you made this amount in income..Most likely you will not know about it for a few years until the IRS catches up..You will them get a bill for the taxes, penalties and interest that will total about 1/2 of the banks loss..
Long before you have a repossession (voluntary or otherwise)..you better get good legal advise in your state and find out ALL the possible future ramifications..
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Mac
Re: voluntary repossession
What I don't understand - sorry, insult not intended - is why folks think it's OK to just get another house and walk away from the first one, ignoring the obligation they signed up for. Is that really all that reputation is worth anymore?
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Karen
Re: voluntary repossession
I whole-heartedly agree with you. People need to live up to their obligations and promises. They are surely not sending the correct message to children.
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Deann
Re: voluntary repossession
Mac,
It is never okay to just walk away. And I am sure it is not a decision that most people take lightly. In my case, their are 5 of us in a 28x52 plus a 158 lb. Saint Bernard. My husband and I both need an office. We have one desk in the eat in kitchen and one in my daughters room. I can't work after she goes to bed at 8. I have a master bath which hasn't been used in years because it is a storage room for sheets, blankets, winter clothes, etc. etc. We put the home up for sale the week before our second child arrived. That was almost 7 years ago. I certainly wasn't going to give up my child bearing years and future children just because we can't sell our house. I think you get to a point where you have no other choice, but to let it go. Now if we just decided for no real reason oh I think we will go live somewhere else the hell with this place, that would be different. It would be wrong. They do make great stater homes, no doubt about it. But they should be called stucker homes, because you are stuck for a very very long time.
It is never okay to just walk away. And I am sure it is not a decision that most people take lightly. In my case, their are 5 of us in a 28x52 plus a 158 lb. Saint Bernard. My husband and I both need an office. We have one desk in the eat in kitchen and one in my daughters room. I can't work after she goes to bed at 8. I have a master bath which hasn't been used in years because it is a storage room for sheets, blankets, winter clothes, etc. etc. We put the home up for sale the week before our second child arrived. That was almost 7 years ago. I certainly wasn't going to give up my child bearing years and future children just because we can't sell our house. I think you get to a point where you have no other choice, but to let it go. Now if we just decided for no real reason oh I think we will go live somewhere else the hell with this place, that would be different. It would be wrong. They do make great stater homes, no doubt about it. But they should be called stucker homes, because you are stuck for a very very long time.
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John
Re: voluntary repossession
Deann:
If the home were located on a lot it would not matter if it were a stick or a MH, it will sell but the fact that you are on rented land like a park makes the selling very difficult. This would apply to a stick built home as well, If it has to be moved than it is a long uphill battle.
The whole thing about filing bankruptcy or letting the home go back is "I made a mistake now you pay for it". Everyone makes bad decisions and most own up to them and do what is right but some take the attitude of it's not my fault because I didn't know any better so I will bail out and someone else suffer.
If the home were located on a lot it would not matter if it were a stick or a MH, it will sell but the fact that you are on rented land like a park makes the selling very difficult. This would apply to a stick built home as well, If it has to be moved than it is a long uphill battle.
The whole thing about filing bankruptcy or letting the home go back is "I made a mistake now you pay for it". Everyone makes bad decisions and most own up to them and do what is right but some take the attitude of it's not my fault because I didn't know any better so I will bail out and someone else suffer.
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Karen
Re: voluntary repossession
No excuse. We had 4 kids and a large doberman in a stick built house that was 1356 sq ft. We had 1 1/2 baths. We made do.
AFTER the kids were grown and gone, we could afford to sale. We bought land and put a double wide on it.
AFTER the kids were grown and gone, we could afford to sale. We bought land and put a double wide on it.
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Deann
Re: voluntary repossession
Karen,
We can afford to sell now. I don't have to wait till my kids grow up. The first person to make me an offer can have it. You can't speak though because you were in a stick built when you had kids. Bet you had a basement, a garage, and a yard too. As far as everyone saying Stick builts depreciate as well, bull crap, where?? They may not appreciate as fast as the houses in surrounding cities might but they will never go down, and that comes straight from Money.CNN.com
We can afford to sell now. I don't have to wait till my kids grow up. The first person to make me an offer can have it. You can't speak though because you were in a stick built when you had kids. Bet you had a basement, a garage, and a yard too. As far as everyone saying Stick builts depreciate as well, bull crap, where?? They may not appreciate as fast as the houses in surrounding cities might but they will never go down, and that comes straight from Money.CNN.com
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