# Need out of Flooded house



## wstevenl (Mar 26, 2008)

Can anyone give me some advice?

I've got a house that I bought 6 years ago and owe most of the mortgage still. Yes, I got a 100% mortgage. I owe about 91 % of the sale price. 
This house got flooded and ruined the carpet, some of the floor boards, and I also had a little bit of ceiling damage, and a door that needs to be addressed. It is a small old/cute house. 
Now that we have 3 kids, we are not going back so we just need to get rid of it. I tried to sell it last year and had no luck (before it flooded). 
I've since looked at the flood rate maps and found that they show half of the property in Flood Zone A but the bank says that it still is determined to not require flood insurance. ( I disagree and think that we should have been told about the flood zone and had flood insurance when we bought it)
The bank sold my loan to Freddie Mack and has little control. If I do get approved for a deferment of payments from F.Mack, I will have to catch it back up if it doesn't sell in the 3, 6 or 12 month time frame so that doesn't sound like a good idea. 

What are my choices? I don't want any money out of it, I just want to get out from under the debt and dual utility bills because we are now renting also. 

Yes, we did get some money from FEMA for the flood damage but it's not alot. We may be able to apply for more after the repairs are done and we have a cost. 

It's tempting to ASK the bank to foreclose, lol, but I don't really know how that would affect our future.


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## Fowler (Jul 8, 2008)

Ask them for a short sale.


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## therunbunch (Oct 5, 2009)

I was also going to suggest short sale. What a horrible situation to be in, ugh. Disappointing to say the least. Keep your chin up.


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## Guest (Jun 23, 2011)

Flood insurance is incredibly costly..I have friends who are paying over $2K/year because the Feds made their area a flood zone and the bank now requires that they purchase flood insurance..
Trying to sell a property which has to carry flood insurance is an extremely difficult thing IMHO.

How did your property flood? is there any way to put something in place to correct the risk of flooding again?


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## Waiting Falcon (Nov 25, 2010)

Some insurance companies will not provide insurance or pay it if the house was in the flood plains. 
That is probably per state and must not include Missouri.


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## Harry Chickpea (Dec 19, 2008)

bostonlesley said:


> Flood insurance is incredibly costly..I have friends who are paying over $2K/year because the Feds made their area a flood zone and the bank now requires that they purchase flood insurance..
> Trying to sell a property which has to carry flood insurance is an extremely difficult thing IMHO.
> 
> How did your property flood? is there any way to put something in place to correct the risk of flooding again?


The high cost flood insurance is typically the "force compliance" policy. It makes sense for them to call around to replace that policy with a lower cost one.


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## Darren (May 10, 2002)

If FEMA finds that a bank did not require people to get flood insurance to get a mortgage on property in a flood zone, the bank can be fined. The fine is per morgage and applies to every mortgage the bank has provided. That applies to the ones for property that is not in a flood zone too.


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## wstevenl (Mar 26, 2008)

What the bank is telling me (after I convinced them to go get a flood risk map from the city) is that the city said "All those properties (near me) come back as not requiring flood insurance even though they look like they are in Zone A on the map". To me it sounds like they are relying more on the company that is paid to make the flood risk determination than they are on the actual maps. 
I wish I could use FEMA as more leverage with the bank but they really don't seem scared at all by me claiming that it IS in a flood zone. 

FYI, our house is near drainage ditches that keep all of the local farm land dry. The land around here used to be more like a marsh. It's a pretty interesting story, look up Little River Drainage District. So, when these ditches can't keep up, they sometimes over flow. In our 6 years here we have seen the yard flood 2 times but never get in the house. This time it did. 

I get the sense that reality doesn't matter a whole lot but the flood maps DO matter and here the bank and city are ignoring the maps. Anyone know how bad it would be for our credit to just stop paying and let it get foreclosed on?


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## Bluesgal (Jun 17, 2011)

wstevenl said:


> I get the sense that reality doesn't matter a whole lot but the flood maps DO matter and here the bank and city are ignoring the maps. Anyone know how bad it would be for our credit to just stop paying and let it get foreclosed on?


There isn't a simple answer to that question as everyone's situation and long term goals are different. Speak with an attorney about ALL of your options before proceeding.


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## Alice In TX/MO (May 10, 2002)

I have flood insurance on a 2000 sq ft house in south Texas. It's less than $300 / year.


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## Cuba Ridge (Feb 11, 2009)

therunbunch said:


> I was also going to suggest short sale. What a horrible situation to be in, ugh. Disappointing to say the least. Keep your chin up.


Short sale means that the bank agrees to allow you to sell the home for less than you owe on it AND agrees to NOT come after you for the difference (important to get in writing).

And you will are suppose to pay income tax on the amount that the bank writes off.


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## Haven (Aug 16, 2010)

Was there no disclosure from the previous owners when you bought the place? Sounds like it may have flooded in the past, and they were legally responsible to disclose this information to you at the time of sale.


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## Stonybrook (Sep 22, 2007)

^ This.


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## BarbadosSheep (Jun 27, 2011)

Foreclosure is not the end of the world. It will hurt your credit for maybe 7 years. We lost a house probably 8 years ago and my credit is really good again. It really depends on your state and bank though. If the bank gets a deficiency judgement, you have to pay the difference between what you owed and what they got at the sale. Also, any amount written off is considered income by the IRS and you have to pay tax on it. Consult a real estate lawyer in your state though as laws do vary by state and circumstances.


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## Scottland Jerseys (May 13, 2002)

You need to check on the IRS question. We've heard that the IRS is forgiving taxes on foreclosures and short sales through the year 2012 for owner occupied property.


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## Wylie Kyote (Dec 1, 2009)

And you will are suppose to pay income tax on the amount that the bank writes off.[/QUOTE said:


> That can provide problems for the new owner/purchaser if the taxes aren't paid.
> 
> 
> Wylie


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## Dutchie (Mar 14, 2003)

Why do you have dual utility bills?


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## Ann-NWIowa (Sep 28, 2002)

The danger in foreclosure (other than credit rating) is that the mortgage holder might take a judgment against you for the deficiency. If the foreclosure is "in rem" that means its against the property only, but if not they will come after you for the deficiency. 

Any chance you'd qualify for a FEMA buyout? FEMA buys properties that flood and removes all buildings from the property and it can never again have a permanent structure built on it. Problem with that is it doesn't sound as if your property would qualify.

What about fixing the house and renting it for enough to pay the mortgage?


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