Posted on: 01st Mar, 2009 09:18 pm
Here is my story.......
I currently own a home in which I have never been 30 days late on a payment. Although I have never been 30 days late, almost every month I have paid my mortgage past the due date of the 1st resulting in a late fee. IndyMac holds my first mortgage which is an I/O ARM scheduled to reset in 2011 and CitiMortgage holds the second. Both mortgages total roughly $400K but the current value of my property is $320K. Up until about a year ago I didn’t have a problem making the payment because truthfully my salary has remained steady but it seems all other expenses have gone up (i.e. utilities, gas, healthcare, insurance, etc). In addition to becoming financially squeezed, my fiancé who is in the military and who will become my wife in two months has just received military orders to relocate to CA in July. Best case scenario is that I will be able to immediately land a job in CA thus maintaining a steady stream of income. However, based on the state of the economy and current job market, I am not holding my breath. In four short months I will resign from my job resulting in 100% loss of income and move to the opposite end of the map leaving my home behind. As previously mentioned, with my current income it has already become a struggle to pay the mortgage but a complete loss of income would almost certainly spell doom and gloom for my house and credit score.
I called IndyMac to ask about a short sale and they provided me with a financial packet to submit for consideration. My real estate agent is under the assumption that short sales are ONLY available to those who are behind on their payments but IndyMac says this isn’t necessarily true. 1.) I am not sure how to proceed but I know I need to do something. 2.) In your experience(s) have you seen short sales given to someone to “prevent†a foreclosure or must one be behind in their payments first? I would also be interested in a Deed in Lieu if I could get both lenders to agree. 3.) Speaking of agreeing, how hard is it working with two lenders instead of one?
Thanks in advance for all your guidance and advice.
I currently own a home in which I have never been 30 days late on a payment. Although I have never been 30 days late, almost every month I have paid my mortgage past the due date of the 1st resulting in a late fee. IndyMac holds my first mortgage which is an I/O ARM scheduled to reset in 2011 and CitiMortgage holds the second. Both mortgages total roughly $400K but the current value of my property is $320K. Up until about a year ago I didn’t have a problem making the payment because truthfully my salary has remained steady but it seems all other expenses have gone up (i.e. utilities, gas, healthcare, insurance, etc). In addition to becoming financially squeezed, my fiancé who is in the military and who will become my wife in two months has just received military orders to relocate to CA in July. Best case scenario is that I will be able to immediately land a job in CA thus maintaining a steady stream of income. However, based on the state of the economy and current job market, I am not holding my breath. In four short months I will resign from my job resulting in 100% loss of income and move to the opposite end of the map leaving my home behind. As previously mentioned, with my current income it has already become a struggle to pay the mortgage but a complete loss of income would almost certainly spell doom and gloom for my house and credit score.
I called IndyMac to ask about a short sale and they provided me with a financial packet to submit for consideration. My real estate agent is under the assumption that short sales are ONLY available to those who are behind on their payments but IndyMac says this isn’t necessarily true. 1.) I am not sure how to proceed but I know I need to do something. 2.) In your experience(s) have you seen short sales given to someone to “prevent†a foreclosure or must one be behind in their payments first? I would also be interested in a Deed in Lieu if I could get both lenders to agree. 3.) Speaking of agreeing, how hard is it working with two lenders instead of one?
Thanks in advance for all your guidance and advice.
Hi Citi&Indy,
As far as I know, lenders do not offer the short sale if you are current on your mortgage payments. However, if IndyMac has said that they may accept your request for short sale, then I think it is good for you to go ahead. You can complete the financial packet and submit it to the lender.
As far as deed in lieu is concerned, you can speak to the lender about it and check if he agrees to it or not. As far as second lender is concerned, I doubt whether he will accept it. If the second lender does not accept it, then you will be liable to pay the dues to him.
Thanks.
As far as I know, lenders do not offer the short sale if you are current on your mortgage payments. However, if IndyMac has said that they may accept your request for short sale, then I think it is good for you to go ahead. You can complete the financial packet and submit it to the lender.
As far as deed in lieu is concerned, you can speak to the lender about it and check if he agrees to it or not. As far as second lender is concerned, I doubt whether he will accept it. If the second lender does not accept it, then you will be liable to pay the dues to him.
Thanks.
thank you so much for your prompt reply. my agents seems to think the same which is i cannot take advantage of a short sale because i am not behind nor have i ever been behind on my payments. however, i have asked both my first and second mortgage holders on multiple occassions and they both stated that one doesn't need to be behind on their payments to receive approval for a short sale......although it doesnt hurt. specifically indymac provided me a packet to fill out for a short sale approval whereas citi said "once i receive an offer" submit the offer along with a few financial documents for approval. ok am i the only one confused? why would i put my house on the market without knowing whether i will be approved for the first and second? seriously what am i missing?
I would suggest you to submit a short sale request to your lender as they have said that they will consider your offer for a short sale. If you do not list the property in the market, you will not be able to know what type of offers you can get.
Thanks adonis! Is it just me or are others with a 1st and 2nd mortgage left scratching their heads at the thought of two lenders taking upwards of 30-60 days mulling over whether to accept a short sale offer? Also, the shortsale packets I received from Indy and Citi both request that the financial paperwork along with offer are faxed in at the same time but I feel some kinda way about my agent, albeit a GREAT agent, seeing all my personal financial data.
Hi Guest
You are not the only person to face this issue. There are a lot of people who are facing similar problems with their 1st and 2nd mortgage lender. As far as the financial paperwork is concerned, the lender will have the right to ask for it. Lender will judge your financial situation depending upon the paperwork you submit and then approve or reject your short sale request.
Thanks.
You are not the only person to face this issue. There are a lot of people who are facing similar problems with their 1st and 2nd mortgage lender. As far as the financial paperwork is concerned, the lender will have the right to ask for it. Lender will judge your financial situation depending upon the paperwork you submit and then approve or reject your short sale request.
Thanks.
Hello and thanks for your reply. My last post wasn't clear enough because I was rushing a bit so allow me to elaborate. I have no problem providing my financial paperwork to the lenders. However, per the instructions for both lenders, the financial paperwork should be faxed with an offer but I feel uncomfortable providing such personal financial information to my real estate agent.
What are the interest rates on both mortgages? My plan would be as follows...
1. Loan modification to reduce your payments (not forgive any principal balance).
2. Rent out your home for whatever you can while you are living in CA. Rental income will really help you to make those payments.
3. Sell the home when the value equals your loan balance.
1. Loan modification to reduce your payments (not forgive any principal balance).
2. Rent out your home for whatever you can while you are living in CA. Rental income will really help you to make those payments.
3. Sell the home when the value equals your loan balance.
