What happens if I need to let two houses default this year?

Deal Score0

Long story short, we have one house for sale 3 years w/a va mortgage in default hoping for a short sale, worse case scenario deed in lieu. Because we were making two house payments, we borrowed $ 30k to keep above water for two years until the above default could not be kept at bay. Now we are in repayment of these loans, plus the increase in FL property taxes and insurance, are looking at letting the primary residence (w/conventional loan plus a second mortgage) go at the same time rather than wait a few more years for another possible default, so we can “heal” over the next 24 months and rent. Our credit score is currently 700 with the VA loan in arrears 10 months. We have paid of 4 other mortgages in the past. What happens to credit score, mortgage potential after 2 years, tax repercussion? We may end up filing bankruptcy after all is said if we can’t get out of this house-heavy debt. Advice?

3 Comments
  1. Reply
    Real Estate Guy
    January 27, 2011 at 7:04 am

    both cases, you will owe the bank, they will get a judgement and issue a 1099. Then the IRS will tax you on this as income.

    YOU CAN”T JUST WALK AWAY.

  2. Reply
    ☼AstrologerJuliAnne☼
    January 27, 2011 at 7:43 am

    Have you thought about selling one of those houses using a Lease Option? Here is a forum where they might be able to answer the other foreclosure questions you have:

    http://www.loansafe.org/forum/

  3. Reply
    globular
    January 27, 2011 at 7:58 am

    All your good stuff goes away, all your hard work goes away.

    If you let these two default like this? You may as well forget you ever had the 700 score and the 4 other paid off mortgages in the past.

    Getting a good loan in two years, won’t be possible most likely with two recent foreclosures on your hands.

    If you can, go into the landlord business, ANYTHING to keep this from happening.

    I keep going back to the 3 years 30k borrowing and the
    “heal” over the next 24 months

    Bless your heart.
    If you just can’t do it anymore and hope is lost and you are tired bless your heart.

    But… I’m telling ya it gets worse if you default. The banks ARE NOT in a good/forgiving mood right now.

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