Posted on: 12th Sep, 2007 04:28 pm
Blue - thank you for the info. I'll give you more specifics in hopes you can provide additional information. 1st mtg is $187K & 2nd is $46K. 1 yr ago the home was appraised for $236 (this was when we got 2nd mtg). Due to the now depressed area we are seeing homes like ours selling for $215-220. We have had on the market for 10 mo with no offers (now lisetd for $219,900 which will put us upsidedown $38K by the time we po 1 & 2 mtg, taxes and realtor fees). Our realtor said that it is a "choke" mkt for the $200-300K houses- none selling. We are paying $2000 on 1st & $600 on 2nd. We can't survive any longer. We are renting and have offered land contract on this house with pymts of $1000.
When I tt our mtg co their on line apprasial was $200K. How accuate is that? I've read that a 2nd mtg may not work for DIL? What is your opinion. We DO NOT want to file bankruptcy or go into forclosure but we can't pay $2600 for an empty house and another $1000 here.
We relocated for my husband's job and are 800 mi away from a house that we don't need, don't want, can't pay for (but loved while we were there).
What is our best course of action. Thank you so much for your last quick response.
Dynee
When I tt our mtg co their on line apprasial was $200K. How accuate is that? I've read that a 2nd mtg may not work for DIL? What is your opinion. We DO NOT want to file bankruptcy or go into forclosure but we can't pay $2600 for an empty house and another $1000 here.
We relocated for my husband's job and are 800 mi away from a house that we don't need, don't want, can't pay for (but loved while we were there).
What is our best course of action. Thank you so much for your last quick response.
Dynee
Hi Dynees,
You can buy a home immediately after bankruptcy. Nowadays, there are many lenders who approve loans within one day after your bankruptcy is discharged. But it is always advisable for the borrowers to wait for at least two years to purchase home after the discharge of bankruptcy. In that case, it would be easier to qualify for a lower interest rate loan by developing a standard score in the mean time.
BTW, a foreclosure is different from bankruptcy. It cannot happen automatically with a bankruptcy.
You can buy a home immediately after bankruptcy. Nowadays, there are many lenders who approve loans within one day after your bankruptcy is discharged. But it is always advisable for the borrowers to wait for at least two years to purchase home after the discharge of bankruptcy. In that case, it would be easier to qualify for a lower interest rate loan by developing a standard score in the mean time.
BTW, a foreclosure is different from bankruptcy. It cannot happen automatically with a bankruptcy.
Hi Dynees,
A short sale is the sale of your at a price lower than the outstanding balance on your loan. And this an option by which a borrower can pay off at least a part of the loan and avoid a foreclosure. So, the pros is, he can get rid of the loan to some extent as he still has to pay off the remaining part of the balance. And, in this process he saves his credit from going down by several points on account of short sale.
The cons is, the lender may forgive the remaining part of debt. But then you will have to pay taxes to the IRS after you get Form 1099C from the lender.
Take Care
A short sale is the sale of your at a price lower than the outstanding balance on your loan. And this an option by which a borrower can pay off at least a part of the loan and avoid a foreclosure. So, the pros is, he can get rid of the loan to some extent as he still has to pay off the remaining part of the balance. And, in this process he saves his credit from going down by several points on account of short sale.
The cons is, the lender may forgive the remaining part of debt. But then you will have to pay taxes to the IRS after you get Form 1099C from the lender.
Take Care
Hi Dynees,
First of all, I would suggest that you avoid going for a bankruptcy. That's the worst thing you would do without exploring other options. This is because it's going to affect your credit such that for the next 7 years it would remain on your credit report. So, getting a loan, if required will not be that easy for you.
Now, considering the foreclosure or the short sale, the latter seems to be a better option. No doubt, both affects your credit but the latter takes around 1 year to come off whereas the foreclosure would remain on your credit report as long as a bankruptcy does. This does not mean you won't get credit in these years at all, but you won't be able to qualify for better rates. So, the 1-year versus the 7 years is something you need to think of. If you decide to go for a short sale, you need to get in touch with an efficient real estate agent who can help you out with the sale.
Now, when you are to inform the lender about short sale, take the help of an attorney to negotiate the short sale. Also, the attorney can negotiate with the lender as to how the short sale will appear on the credit report. Why I am saying this is because, usually short sale is noted on the credit report as "settled for less than the full balance" and this is what lowers your credit score. Often you do find lenders reporting it as "paid with no late payments" but that depends on how your attorney negotiates.
Another reason as to why a short sale would affect your credit is because the lender may issue a deficiency judgment. In such a case, the court will send you an order so that you pay for the difference between the outstanding loan balance and the home sale price.
The deficiency judgment is something, which the lender can pursue even if the debt is shown on the credit report as "paid as agreed". Now, this is where your attorney needs to negotiate. He can request the lender so that the latter sends the information to credit bureaus (for updating your report) stating that the debt has been "paid in full without deficiency judgment". It may so happen the lender can ask you to follow a repayment plan for the deficiency judgment.
As far as your latest question is concerned, well, bankruptcy isn't automatic with a foreclosure. But if one files bankruptcy while foreclosure has been declared, the latter process has to stop till the bankruptcy proceedings are on.
Once the proceedings stop, the foreclosure is carried on as usual. So, bankruptcy just stops the foreclosure for a certain time. Now, in your situation, I feel, you should go for the short sale. The question remains – "how would you pay for the remaining part?" Well, I may sound odd, but let's face it, you may have to lose some of your assets and sell them so that you can pay off the loan if at all you don't need the house. Your assets can be even an insurance policy, which you may now think of selling. There can be other options but you need to think as to which you would lose because at this moment you need to compromise somewhere.
Regards,
Jessica
First of all, I would suggest that you avoid going for a bankruptcy. That's the worst thing you would do without exploring other options. This is because it's going to affect your credit such that for the next 7 years it would remain on your credit report. So, getting a loan, if required will not be that easy for you.
Now, considering the foreclosure or the short sale, the latter seems to be a better option. No doubt, both affects your credit but the latter takes around 1 year to come off whereas the foreclosure would remain on your credit report as long as a bankruptcy does. This does not mean you won't get credit in these years at all, but you won't be able to qualify for better rates. So, the 1-year versus the 7 years is something you need to think of. If you decide to go for a short sale, you need to get in touch with an efficient real estate agent who can help you out with the sale.
Now, when you are to inform the lender about short sale, take the help of an attorney to negotiate the short sale. Also, the attorney can negotiate with the lender as to how the short sale will appear on the credit report. Why I am saying this is because, usually short sale is noted on the credit report as "settled for less than the full balance" and this is what lowers your credit score. Often you do find lenders reporting it as "paid with no late payments" but that depends on how your attorney negotiates.
Another reason as to why a short sale would affect your credit is because the lender may issue a deficiency judgment. In such a case, the court will send you an order so that you pay for the difference between the outstanding loan balance and the home sale price.
The deficiency judgment is something, which the lender can pursue even if the debt is shown on the credit report as "paid as agreed". Now, this is where your attorney needs to negotiate. He can request the lender so that the latter sends the information to credit bureaus (for updating your report) stating that the debt has been "paid in full without deficiency judgment". It may so happen the lender can ask you to follow a repayment plan for the deficiency judgment.
As far as your latest question is concerned, well, bankruptcy isn't automatic with a foreclosure. But if one files bankruptcy while foreclosure has been declared, the latter process has to stop till the bankruptcy proceedings are on.
Once the proceedings stop, the foreclosure is carried on as usual. So, bankruptcy just stops the foreclosure for a certain time. Now, in your situation, I feel, you should go for the short sale. The question remains – "how would you pay for the remaining part?" Well, I may sound odd, but let's face it, you may have to lose some of your assets and sell them so that you can pay off the loan if at all you don't need the house. Your assets can be even an insurance policy, which you may now think of selling. There can be other options but you need to think as to which you would lose because at this moment you need to compromise somewhere.
Regards,
Jessica
thank you for the info - we have no assets to sell to make up the difference.....no insurance policies, etc. Question - we are in SC and the house we are trying to sell is in IN. Which state should we find an atty to help us negotiate a short sale? The 1st lender is willing to work with us - the 2nd said they would sue us for defaulting on the loan. They want the full amount.
Hi Dbraun,
Welcome to our forums.
If the first lender is willing to work with you then that's great. You should find an attorney in Indiana itself as the property is located there.
You have also posted this question at http://www.mortgagefit.com/second/sue-unpaidloan.html . Just have a look at what Jessica has advised you.
Good luck
Welcome to our forums.
If the first lender is willing to work with you then that's great. You should find an attorney in Indiana itself as the property is located there.
You have also posted this question at http://www.mortgagefit.com/second/sue-unpaidloan.html . Just have a look at what Jessica has advised you.
Good luck
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