Posted on: 01st Oct, 2009 07:15 am
Hi there - this is my first time posting to this forum.
My husband and I relocated for work in February of 2009. We left behind a house in Oregon that we have been trying to sell since June. We are about $10,000 upside down on the house - really not that much. We owe $165K and the house could probably sell for around $150-155K.
We can no longer maintain the mortgage (we were hoping it would sell). It hasn't sold and our realtor has suggested we get the short sale process started. We are in favor of this, because at this point we are already relocated, and are not concerned about our credit for the next 3-5 yrs if we had to rebuild after this loss.
My question - we are considering stopping the payment on the mortgage this month, and starting the short sale process. We are prepared to lose the house to foreclosure if the bank does not agree to a short sale.
We feel the bank most likely will, as the house is really not that much of a loss at this point - but I guess I'm wondering if it's smart to stop the payments at this point. We can't really afford them, and have A LOT of debt from a business that is failing because of the economy we need to pay on that is knocking on our door. We are prepared to let the house go... We have a great credit score otherwise, in the mid 700's. So, i feel like if the bank did offer a short sale, we could bounce back within a few years. Am I wrong to think so?
My husband and I relocated for work in February of 2009. We left behind a house in Oregon that we have been trying to sell since June. We are about $10,000 upside down on the house - really not that much. We owe $165K and the house could probably sell for around $150-155K.
We can no longer maintain the mortgage (we were hoping it would sell). It hasn't sold and our realtor has suggested we get the short sale process started. We are in favor of this, because at this point we are already relocated, and are not concerned about our credit for the next 3-5 yrs if we had to rebuild after this loss.
My question - we are considering stopping the payment on the mortgage this month, and starting the short sale process. We are prepared to lose the house to foreclosure if the bank does not agree to a short sale.
We feel the bank most likely will, as the house is really not that much of a loss at this point - but I guess I'm wondering if it's smart to stop the payments at this point. We can't really afford them, and have A LOT of debt from a business that is failing because of the economy we need to pay on that is knocking on our door. We are prepared to let the house go... We have a great credit score otherwise, in the mid 700's. So, i feel like if the bank did offer a short sale, we could bounce back within a few years. Am I wrong to think so?
it is tough when you're between a rock and a hard place. it doesn't seem as if you have too many choices here. i'd like to think that the bank would strongly consider the short sale, especially in light of the minimal difference between supposed value and the balance of your mortgage. as for stopping your payments, it would also seem you have little choice there.
your lack of concern with credit score isn't too alarming, and it's understandable given your current situation. as you say, you can rebuild it.
i think you've reasoned it out pretty well.
your lack of concern with credit score isn't too alarming, and it's understandable given your current situation. as you say, you can rebuild it.
i think you've reasoned it out pretty well.
bank will surely accept it. but you need to pay the deficit amount.
i will recommened you to go for DIL as you can improve your credit score easily in 3-5 yrs.
i will recommened you to go for DIL as you can improve your credit score easily in 3-5 yrs.
how in the world anyone can declare "bank will surely accept it" is astounding!
we have seen cases in which lenders take 3-4 months before deciding whether to accept a short sale or not...lenders go get appraisals to ensure that what the proposed short sale figure would be is going to be reasonable to market.
what planet does this comment come from? please, if you feel confident enough to propose such a statement, at the same time declare your area of expertise. someone saying something like the above had better be an expert in the field. people are not well-served by bloated statements that are not backed up by reality.
we have seen cases in which lenders take 3-4 months before deciding whether to accept a short sale or not...lenders go get appraisals to ensure that what the proposed short sale figure would be is going to be reasonable to market.
what planet does this comment come from? please, if you feel confident enough to propose such a statement, at the same time declare your area of expertise. someone saying something like the above had better be an expert in the field. people are not well-served by bloated statements that are not backed up by reality.
Thank you GMakerley - your advice seems very stable and correct.
yes, I'm hoping that the bank will go for it, considering the minimal difference in value... of course it just sickens me at the thought of them not going for it, and going after a foreclosure.
If they do not accept a short sale. Is going after a DIL a better option than giving up?
We have been paying faithfully to them for over 3 years, but I don't know that makes any difference to them. Our loans (1st for $103K, 2nd for $62K) are both from Chase (was WAMU). I don't know if you have any experience dealing with that particular lender?
Thank you very much.
yes, I'm hoping that the bank will go for it, considering the minimal difference in value... of course it just sickens me at the thought of them not going for it, and going after a foreclosure.
If they do not accept a short sale. Is going after a DIL a better option than giving up?
We have been paying faithfully to them for over 3 years, but I don't know that makes any difference to them. Our loans (1st for $103K, 2nd for $62K) are both from Chase (was WAMU). I don't know if you have any experience dealing with that particular lender?
Thank you very much.
I've also heard that you do not have to pay deficit if you go through a short sale, but the lender may 1099 you for the forgiven debt. Is this correct? If so, insolvency might be an option for me because we have so much outstanding debt otherwise and no assets really :(... I'm 28 and really feel this is a wake up call for me, to get my financial life in order and get out of debt. It's just a shame that it has to happen this way.
Thanks everyone!
Thanks everyone!
no Amy,
In short Sale, mortgage lender may come after you to recover deficit amount.
you are just 28. can improve in near future. so be Positive
In short Sale, mortgage lender may come after you to recover deficit amount.
you are just 28. can improve in near future. so be Positive
amy, i cannot say i know anything about how chase does business, but they seem to be head and shoulders above bank of america, for example...not that that's a good thing, necessarily. after, bofa isn't breaking any records on the good side these days.
i would suggest that a deed in lieu of foreclosure will certainly beat the daylights out of a foreclosure, so if the short sale doesn't get approved, that's your likely next best bet. given the numbers you've tossed out, it's my opinion that a lender would be wise to accept the short sale here. but, frankly, "who am i" fits here. i don't make those kinds of decisions, and i'm not qualified to do so - this is pure conjecture.
and i have to agree that 28 is early enough in life to salvage your credit.
i would suggest that a deed in lieu of foreclosure will certainly beat the daylights out of a foreclosure, so if the short sale doesn't get approved, that's your likely next best bet. given the numbers you've tossed out, it's my opinion that a lender would be wise to accept the short sale here. but, frankly, "who am i" fits here. i don't make those kinds of decisions, and i'm not qualified to do so - this is pure conjecture.
and i have to agree that 28 is early enough in life to salvage your credit.
I was told that in part of the negotiations with the bank for a short sale, we can work with the bank to not have to pay the deficit - just the taxes on the deficit. I've read this other places online as well... so I'm confused.
What is better, short-sale or DIL?
Anyway - I am where I am. Staying positive... things will work out ok.
What is better, short-sale or DIL?
Anyway - I am where I am. Staying positive... things will work out ok.
i honestly think that a lender can and will negotiate to its best advantage, of course. if they feel a short sale that's proposed to them is too short, they'll back off, i imagine. in your particular case, if you have estimated the value appropriately, i have to guess that a thinking lender will accept a short sale proposal without much convincing.
it's also my opinion that a short sale is going to be more advantageous than a deed in lieu. it ought to have less of a negative effect on your credit.
again, i don't have specific expertise here, so it's mere opinion. it's worth your while to have all these conversations with the lender; barring that, find a counselor from a non-profit to chat with.
it's also my opinion that a short sale is going to be more advantageous than a deed in lieu. it ought to have less of a negative effect on your credit.
again, i don't have specific expertise here, so it's mere opinion. it's worth your while to have all these conversations with the lender; barring that, find a counselor from a non-profit to chat with.
Thank you. good advice. My next action is to work alongside my realtor and seek approval from the lender for a short sale. We'll see what happens. I'll keep you updated! thanks againf or taking the time to respond.
you are welcome