How will the banks treat this one?

Question

Was living in one condo and needed money for down payment on a larger one for my family. The first condo was for sale but is just sat, so I rented it, when the new one was completed. Now the payments on both are crushing me. $1650 on the first and $2,350 on the new one. I can handle the second one okay, that's where we are living now.

On the first condo, I borrowed money on a home equity loan for additional down payment on the second. First mortgage is for $145K, the amount on the home equity is $35K. So I owe a total of $180K, the market is now $159K

On the home equity I can still write a check for $15K.......at the time they issued the loan it was worth more........

Did I mention that my tenant just moved out, he was only good for $950 per month.......so $1650 minus his 950 left me $700 per month in the red. Now it's the full $1650........this is a seasonal community and the rental market is weak.....

Here's the question, if I write the a check for the remaining $15,000, left on the home equity from the first condo........then just let the bank have the unit back........

what are they likely to do and

what will they do to me?

The $15K in money I clearly have no intent of paying off unless by some miracle the unit sells for $195 and I can wipe out everything and walk away.....

If you have any other input I'd appreciate it. Thanks

Thanks from Florida :(

Answer 1

You took a chance on the market holding up for you on the sale of the first unit and you lost. There is no easy way out of this mess you've put yourself in. I guess you have two choices here neither of which is very appealing. Try to rent the place out and accept less than $950 a month or be aggressive on selling the first condo and drop the price to where it will sell. You or the Mrs. will probably need to come up with a second part time job to cover the difference caused by either option. That's the only way I see out. Good luck.