I own investment property. What are my liabilities if the property is foreclosed?

Question

I know my credit score will be destroyed. What about costs, fees, penalties, fines? Am I still responsible for taxes owed on the property (due in October and December)? Do my 1st and 2nd mortgages disappear? Or will I still have to pay the mortgagors any monies?

Answer 1

any foreclosure on a first wipes out the 2nd, so the 2nd usually

goes to the sale at the sheriff to pay off the first.

in some states, the mortgage lender can come after you personally.

I suggest you consider selling part of your property instead of all of it

to procure enough money to save it from foreclosure.

I can guide you further on that if  

Answer 2

Your credit will be destroyed for a long time. Contact your bank and ask them if they will accept a short sale. If so put the property up for sale and try to find a buyer. There are certain procedures for short sales but lenders would rather loose a little in lieu of foreclosing on the property which will cost them more in the long run. If foreclosed, you give the property back to the bank  and therefore you would not owe ... there may be some bail out money that is coming available to help people .... you may want to contact your local bank.