Underwater Balloon Mortgage?
I purchased my condo in 2004 & took out a seven year Fannie Mae backed balloon mortgage at that time. I wasn’t planning on staying there more than 3-4 years so I figured there was no harm in doing that.
I’ve been trying to sell for some time but at the time I tried to sell was when the real-estate market fell through so no one was buying. Now my condo value has shrunk. I purchased at $ 130,000 in 2004. In 2005 it appraised for $ 166,000. I currently owe $ 120,000 . . . The condo is worth around $ 60,000 to $ 75,000.
I currently do not live in this condo, I live with my significant other (not married) in their house. I had a tenant in the place for a few months but they left as they couldn’t afford the rent (which is a good amount less than my monthly payments anyway)
Illinois is not an anti-deficiency state so, as I understand it, if the balloon mortgage resets without me either selling the place or finding a bank that’s willing to finance a home that’s worth half of the loan then the current mortgage holder can repossess the home (which probably isn’t a bad thing at this point) and then come after me for the difference in what they would be able to dump the condo for.
I’m already in talks with real-estate attorneys on how to best deal with this . . . Anyone else have any experience in this and suggestions?