Jose Canseco Weighs His Foreclosure Options

by Andy Miofsky, Esq.

May 11, 2008

Lifetime batting average: .266
Home Runs: 462
Runs Batted In: 1407
Houses in Foreclosure: 1

Mr. Canseco told Inside Edition that he walked away from his $2.5 million, 7,300-square-foot home in suburban Encino because it didn’t make sense to continue making payments.

Homeowners with mortgages in default face several choices, similar to Mr. Canseco. The cold hard reality is whether you can afford your monthly payment. Often that decision involves two parts. First, homeowners often focus on the immediate picture, the default status of the loan, as they try to catch up the delinquent payments. But the second factor is more important. Can you keep up with future monthly payments? It does little good to squander what few reserve funds you can muster to bring a mortgage current only to fall behind months later and eventually lose the home to foreclosure. So what is a person to do? Consider these walk-away options:

1. Sell your house to realize a profit on the equity and use that money as a down payment on a cheaper house. Be realistic and consider accepting a quick sale. This option avoids foreclosure and pays off the existing mortgage.
2. Save as much money while you live in the house waiting for the foreclosure to complete. You are not required to make mortgage payments during a foreclosure. You will need that money for a down payment on another house, or a contract for deed purchase. But depending on your state laws, you might owe a deficiency balance if the house sells at foreclosure sale for less than you owe on the loan.
3. Hire a foreclosure defense attorney to defend the foreclosure case to give you more time to consider all legal options available to you. Courts are becoming more receptive to stop the rubber stamp foreclosure proceedings and are beginning to make mortgage holders prove they have a right to foreclosure. A foreclosure attorney can present several options, such as modifying the loan to more favorable terms, delaying foreclosure while you sell the property or stopping the foreclosure on legal grounds.

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Andy Miofsky, Esq.

Andy Miofsky is an Illinois consumer rights lawyer with offices in Granite City Illinois and Mount Vernon. Andy represents people with bankruptcy and student loan debt problems throughout the Central and the Southern District of Illinois since 1979.

Last modified: May 11, 2008