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Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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My Son owns an investment property (home) in Las Vegas that

Customer Question

My Son owns an investment property (home) in Las Vegas that has a first mortgage of $330m and a HELOC of approx. $40m. The present value of the home is now approx. $170m. The home is rented, but payments are not enough to cover all costs. My Son is self-employed in the Tour business, and his work has dwindled to only 30-40% of full time work. He is not behind on any payments on his own home, or the rental property, but is struggling each month to find income to cover expenses. He is considering just walking away from the rental house. Is this an advisable action ? His personal home is also "underwater" by some $50m, but he wants to stay in this home. He has no other significant assets. His current credit rating is good. Should he consider bankruptcy ?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 7 years ago.

Prior to filing for bankruptcy, your son may want to first consider negotiating with the lender for a modification.

The first thing to be aware of is that a lender is not going to modify a fully performing loan. You will typically need to be 60-90 days behind before they will discuss modification. They will only modify to mitigate their risk . As long as you are paying, they have no incentive to modify.

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