New York Investment Foreclosure

I have 2 investment properties in NY. One is in good shape financially: rented to good couple, not underwater. The other, a 2 family rental, is about $15k - $20k underwater and difficult to rent. While it is fully rented at this time, should a tenant leave it has taken up to 3 months to rent. As it is, even fully rented I have to put about $200/month into it to cover the mortgage. I have never missed or been late with a payment. I have been told that I am not eligible for refinancing (no equity), nor for any of the government programs.

My question concerns what happens if at some point I decide to let the bank foreclose on it. I understand the process of foreclosure, but what would the potential effect be on the other property, my home here in Arizona, and any 401k savings.

Thanks in advance.

John

If you're financed through the same lender, check your contracts to see if there are provisions that would enable them to declare you in default on both of your properties if you default on one. Also, while you are concerned about your assets in Arizona, if there is equity in your second New York investment property I would expect your creditors to look there first.

Your retirement funds are exempt from collections. Leave them where they are.

There is potential for your creditors pursuing you for any deficiency they obtain, pursuing your nonexempt assets in another state. Whether or not they would do so? That will depend upon their policies, the manner of the foreclosure (I haven't researched New York, but the simpler methods often prevent the bank from pursuing a deficiency) the dollar amounts involved, your assets above your exemptions, and other factors they deem relevant.