I am SO screwed...

**thefunkybeat** · 07-17-2008, 12:21 PM

I need help... bad. If any of you have suggestions, let me know...

In August 2006 I bought my first home (an 1100 square foot 2/2 condo in Orlando) for $169,900. My appraiser told me it was 1102 square feet. Three months after I closed my neighbors start talking about how our condos are only actually 840 square feet. Sure enough, after busting out the tape measure and doing the math myself... 840 square feet. I was ripped off by almost $40,000.

I started a class action lawsuit against the developer who sold us the condos. We filed a motion, they filed a motion, a hearing was scheduled, but before the hearing the developer went bankrupt and many of their employees left the country. Somebody then said we should file claims on our title insurance. It sounded like a long shot, but why not? The worst they can do is say no. That didn't work either. Now I have a different attorney who is in contact with my appraisers errors and omissions insurance company, but he's worried that they'll argue that the 260 missing square feet is no longer worth $40,000 anymore since the real estate market crashed.

Now I have a lovely girlfriend who I want to move to LA with in September so she can go to the college she was accepted to and I can further my music / film production career in a more lucrative environment. BUT... I've got a mortgage with $150k left on the premium, and neighbors with the exact same condo who haven't been able to sell their places for $90,000 for the last 100 days.

I figure I have four options here;

Get the $40,000 from my appraiser, put it all towards my premium, negotiate a lower payoff price with my mortgage company (like $120,000), and sell my condo for $80,000 and get close to breaking even.
Get the $40,000 from my appraiser, put it all towards my premium, negotiate a lower premium with my mortgage company, refinance to a 40 year fixed mortgage at a lower interest rate to get my monthly payments down to $500 or $600 a month. (I think I can get $800 a month for rent and once $150 association dues and $50 monthly maintenance is taken out of that I'd have to be paying only $600 a month to break even.) (I can't afford to pay for a place in LA AND a place in Orlando every month.)
Do a "property swap" with someone who is as screwed as I am in LA. (I'm not sure how this works, but I've heard it can be done.)
Walk away and let my credit take the hit.

Suggestions? Please???

~Dave
thefunkybeat@yahoo.com

**Texas_** · 07-22-2008, 04:59 AM

Originally Posted by thefunkybeat

Walk away and let my credit take the hit.

I would do everything possible NOT to resort to this option. Defaulting on a mortgage is one of the worst possible blots on your record. It will impact your ability to buy a new home for YEARS to come.

If you can rent the condo out and come close to breaking even, at least you'll have a chance of treading water for a while. Real estate markets have a funny way of changing dramatically in five or ten years. That may seem like a long time now. But then, a foreclosure on your credit record may seem a LOT longer!

Perhaps even save up that extra $60K, pay off the difference to your mortgage company at closing, and take a huge capitol gains loss on your taxes? I've seen sellers in your situation bring huge checks to closing before. They were not happy about it but it seemed better than the alternatives. Are you willing and able to pay $60K to live your dream in CA? Is this dream worth destroying your credit for the next decade?

**VancouverWa** · 07-22-2008, 12:10 PM

I agree with Texas, try the rental market.
How do they go about measuring sq.ft. in your market? Outside walls or inside? We measure ouside walls in my local market.
It's a weird market right now, but like Texas said it will come back. The one truth I tell everybody is "everyone needs shelter".

Best of Luck to you

**jamesww** · 07-22-2008, 08:17 PM

Originally Posted by VancouverWa

I agree with Texas, try the rental market.
How do they go about measuring sq.ft. in your market? Outside walls or inside? We measure ouside walls in my local market.
It's a weird market right now, but like Texas said it will come back. The one truth I tell everybody is "everyone needs shelter".

Best of Luck to you

What office do you work out of in Vancouver? The first market I obtain my license in was in Clark county. Also, how is business in that neck of the woods?

**shalo** · 07-26-2008, 04:16 PM

I got stuck in Tennessee, want to go back to LosAngeles,but I can not sell the house,.
If I were you I would get my $40,000 and rent my house for the highest you can get, put that $40K a side just incase renter moved out or anything else. List the house for sale (as an investment property for Investors).
Go to LA, find a cheap but safe place to leave( TUJUNGA or Sunland)
I guess that is it,

I hope that helps
Good Luck