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renting out my home and not paying the mortgage in FL

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  • renting out my home and not paying the mortgage in FL

    I have a home in FL. I cannot continue to make the payments on it due to being transfered to another part of the state with my job. Because of real estate prices, my home is worth 100.000 LESS than what I currently owe. I cannot rent it for the amount I would need for the mortgage. I would like to rent it for a lesser amount so it will be kept up (I have great neighbors and don't want the house to become rundown). Is this legal and if so, what happens to the money. I don't want to do anything illegal, I have been current on all my payments until December 09. I have not made a payment since.

  • #2
    Re: renting out my home and not paying the mortgage in FL

    I wish to inform you that a good option for you is to undertake loan modification. You can negotiate for a reduction in the interest rate, principal, late fees, penalties or increasing the loan term. The modification terms are at the discretion of the lender who has a hope that it is better in the long term to modify and let the performing loan not default.

    AFF

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    • #3
      Re: renting out my home and not paying the mortgage in FL

      The OP asked if it was legal to rent the house while not making the mortgage payment. It is legal to rent it while you are behind in payments. You are not currently in default, the bank has not yet taken any steps to retake the house or foreclose on it. You have only missed one payment. It will take several months of non-payment before this begins, and several more months before a foreclosure would become final. Until the house has been foreclosed on, and the title is in the name of the new owner (if auctioned) or the bank (if foreclosed on), you still own the house. You have all the rights as any other owner, including the right to rent it.

      That said, it will create ill will with any tenant if he learns you were behind on payments before you signed a lease with him. If you have no intention of modifying your mortgage or keeping the house, it would not make a good LL-Tenant relationship to enter into a lease. If you must rent the unit out, I would rent it on a month to month basis so the tenant has no impression of stability in the unit. He may continue on in the unit as long as he wishes, giving notice to vacate as required by your state law when he wants to move. You or the bank can give him the required notice to vacate when it comes time to foreclose.

      You may also find, if you check the local rent rates in your market, that you can come close to the mortgage payment with the rent amount. You may be able to collect the rent and make up only the deficiency in the rent yourself, and still continue with the house payments. Could you afford to pay only $100-200 a month towards this mortgage? Keep in mind that there will be tax deductions that you will be able to claim for the rental property too. So renting it may allow you to keep the property until the market rebounds. Do check into the loan modification before you decide.

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      • #4
        Re: renting out my home and not paying the mortgage in FL

        Of course you can rent it. The payments should go to the mortgage company, but is entirely up to you what you do with the money.

        Unless and until the bank begins foreclosure proceedings, you have the right to rent or sell the property. Anything that will assist you in being able to afford paying off the loan.

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