Deed in lieu of Foreclosure/Condo-should i pay HOA or taxes?

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Latest post 08-27-2009 9:50 AM by Drew. 3 replies.
  • 08-07-2009 11:16 AM

    • 11bet11
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    Deed in lieu of Foreclosure/Condo-should i pay HOA or taxes?

    I have a condo that is now a second home.  It was my primary residence for at least two years within the last five years.  I moved out two years ago when I got married and bought my primary residence.  I had a tenant to cover part of the mortgage.  I have lost my tenant, cannot get a new one and lost my job.  I can no longer pay the mortgage on this condo.  I am trying to short sale property but have no buyers.  I am going to try to negotiate a deed in lieu of foreclosure.  Do I need to be current with payment on HOA or Property taxes to get either a short sale or deed in lieu of foreclosure?  What if I can only pay one or the other?  Which is more important?     Here are my questions below:

     

    #1 I lived there for more than two of last five years, would this still be considered primary residence for not having to pay tax consequences on short sale/foreclosure?

    #2 Should I pay the HOA fees still while not paying mortgage?  What is the benefit?  Will they not accept a short sale or deed in lieu if I default on HOA fees?

    #3 Should I pay property taxes?  I can either pay HOA fees or property taxes?  But not both.  Which is more important to keep paying to get the short sale or deed in lei of foreclosure?  Or does it not matter if I don't pay either? 

    #4 If they pursue a deficiency judgment and get it awarded, if I don't have any assets, how do I get out of paying it without filing bankruptcy?  Or will they not award a deficiency judgment if I have no assets? 

     

    Thank you.  I live in Massachusetts. 

  • 08-09-2009 10:45 PM In reply to

    Re: Deed in lieu of Foreclosure/Condo-should i pay HOA or ta...

    Both would be important to pay...defaulting on either will cause immense problems in what you are attempting to do.

  • 08-27-2009 8:41 AM In reply to

    • mzde
      Consumer
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    • Joined on 08-27-2009
    • IL
    • Posts 4

    Re: Deed in lieu of Foreclosure/Condo-should i pay HOA or ta...

    If the bank accepts a deed-n-lieu, you can try to negotiate the past due taxes and assessments.  Regardless, the debt is yours until the property belongs to the new owner.  If there is a foreclosure, everything might roll into the foreclosure sale.  If there is a Chp 7 bankruptcy, I guess everything gets lost in the BKL.....  Your credit will be marred with either the foreclosure or the BKL.  If the deed-n-lieu ends up with a deficiciency balance owed, that would be a problem too.......

  • 08-27-2009 9:50 AM In reply to

    • Drew
      Consumer
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    • Joined on 03-30-2000
    • PA
    • Posts 48,979

    Re: Deed in lieu of Foreclosure/Condo-should i pay HOA or ta...

    Odds are HOA fees and taxes run with land--new buyer gets stuck with them and will act accordingly to discount what he pays.   Lender will not want to take over HOA and back taxes .  But check details--in some places they could run with your as well. HOA?

    What tax consequences of a short sale? If you are insolvent at the time then the paper gain you get by relief from loan is NOT taxable income but the math is a bit technical and I suggest you lay it out on paper with somebody skilled at tax matters as to just how insolvent you are. This is one place where maxing up your paper insolvency at moment of relief from the debt is helpful!! Insolvent does NOT mean bankrupt. But it does get adjusted for the amount of debt relief--grossly oversimplified: if at moment you get debt debt relief you still remain negative as to debt v assets you are "insolvent" --but devil is in details --and lay out details on paper and get help if you cannot make sense of rules.



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