My primary residence currently worth $300K, and the original loan on the house was $585K (first for $60K and second for $120K). The purchase price for the property was $585K
I also own an investment property which is currently worth $225K. The loan on the house is $280K (only first loan). The purchase price for this property was $285K
Now, what I did was I took a second home equity loan of 60K from the investment property and put it towards the second loan of the first property (by refinancing into a lower interest loan). This is how the equation looks like now:
Primary residence
Current value:$300K
Loan 1:$460K (Interest only – 5/1 arm to expire in 2 yrs);This is the original loan
Loan 2: $60K (30 yr fixed P+I); (Refinanced loan)
Investment property
Current value:$215K
Loan 1:$280K (Interest only – 5/1 arm to expire in 2 yrs);
Home equity Loan 2:$60K (15 yr fixed P+I);
I cannot afford to hold on to the properties.
My question is, if I foreclose on both properties, what are the consequences. Can the lenders come after me for the deficiency amount. I tried to short sale for last 6 months, with no success.
I live in southern california