We purchased a home approx. 2 and 1/2 years ago my husband and I want to let the property go into forclosure because we can hardly afford to keep it and the rental income from it is not covering the entire mortgage (we are still having to pay $1100/month). Currently we rent a home at a boarding facility and we are the onsite managers. The problem is that we purchased the home with a co-owner who is on both the title and the loan. We no longer get a long with the co owner for numerous reasons and he does not wish to foreclose. Our adjustible will be going up in 2 years and the home has lost over half its value so it is just a waiting game and a sinking ship investment. Are we liable to get sued? Do we have to move back into the property? Can just my husband move back into the property before we forclose... because we dont want to be held for all the tax liability.... thanks so much for your help....

I am sorry to hear about your situation. As to if you can be sued ... I know that in California, you can not be sued for a mortgage that was to purchase your primary residence. In order to resolve your situation, you may be able to complete what is called a "short-sale" where you sell your property for current market value (not what you owe on your mortgage) and your existing lender will have to approve accepting a "short" payoff of the existing mortgage. In other words, they will take less than what is owed. Also, if your mortgage is a Fannie Mae Or Freddie Mac loan you may be able to get your mortgage modified under one of the new mortgage relief programs.

As to not getting along with the co-owner, in order to complete a transaction on the property, you will have to overcome your differences long enough to resolve this situation. I hope this little bit of information helps ... Good Luck

Jane Whitten // www.janewhitten.com