What happens to my personal home if my rental property forcloses?

October 18th, 2010 | by admin |

I own 2 homes…the one my wife and I live in and another we rent out. We havent had a renter in 2 months and the payments on the second house are getting behind becuase times are tough and we cannot afford 2 mortgages. I’m affraid if I miss any more payments the house will slip into forclosure or possibly a short sale…what will happen to my current house though? They are with separate banks in 2 difference cities?

You should get a good real estate lawyer to give you good local advice- you may be able to do small things now that may protect you later on.

In a lot of states the laws protect your homestead a lot more than rental property.

  1. 5 Responses to “What happens to my personal home if my rental property forcloses?”

  2. By Landlord on Oct 18, 2010 | Reply

    If the second house is in an LLC nothing will happen to your house. They will sue you for the deficit, but can only lien property held by the LLC. If it is a personal holding you can expect them to lien the amount you are refusing to repay. Bad investments are not protected by the tax payers like your home is.
    References :

  3. By glenn on Oct 18, 2010 | Reply

    You should get a good real estate lawyer to give you good local advice- you may be able to do small things now that may protect you later on.

    In a lot of states the laws protect your homestead a lot more than rental property.
    References :

  4. By anaise on Oct 18, 2010 | Reply

    Two different mortgages, two different scenarios. If you allow your personal home to fall back, then yes, it can lead up to foreclosure. The second house has nothing to do with the first unless you used the first as collateral(but you are still paying on it.)
    References :

  5. By Caveat Emptor on Oct 18, 2010 | Reply

    Nothing – as long as your mortgage loan on it continues to be paid.
    References :

  6. By Kevin on Oct 18, 2010 | Reply

    The first thing you need to do is contact the mortgage holder of the rental property. Explain to them your situation and that you need to arrange a temporary forbearance on payments. They will more then take your information and allow you to skip a few payments moving them to the back end of your loan. The next step is to go to http://www.daveramsey.com and locate a (ELP) endorsed local provider to help you arrange the sale of the rental property. These are trusted real estate agents with the heart of a teacher. Lastly and most important, LEARN FROM YOUR MISTAKE! Long distance land lords don’t work.
    References :

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