Has Anyone Gone Through a Shortsale or Foreclosure?

Hey my mom told me to respond to this since i work with these a lot. Most realtors and such won't tell you this since theres nothing in it for them, but I would first suggest a deed in lieu, which is where you offer the bank the deed so they don't have to go through the foreclosure process, and it saves you credit like a short sale does. Also, with this option you don't have to wait around for a buyer. As soon as the bank approves the deed in lieu (the same process it takes for a short sale, only there's no third party involved ... Aka the buyer), you're done. You deed the property back to the bank and you're done. With a short sale you never know if the buyer is going to flake out or what might happen, and you can't even start the process until you have an offer. With a deed in lieu, you can start right now just by picking up the phone and calling your bank. So that's what I would suggest first, and if your bank won't do it, then list it as a short sale. Or even do both at the same time ... List it while you talk to the bank about a deed in lieu so that if they won't take that, you'll already be started with the short sale process.

Hi Jesse and anyone else who is going through this or knows someone who is. I am a mortgage collector (yeah I know) so here are a few options:

Yes banks can go after you if you have gone through a foreclosure or charge off for the remaining balance, depending on your state. You may also have a tax liability where the bank sends a notice to the Taxes and report all the money that was used as additional income (this is more for 2nd or 3rd liens that people used to buy cars, boats, trailers etc...)

There are several options that the banks have. In reality banks don't want your homes!

Makinghomesaffordable.org, 211.com are great resources to find out what programs you may qualify for.

For your situation Jesse, your primary property could qualify for the HAMP program the condo won't since it is an unoccupied property. However you may qualify for the HARP program.

Outside of these programs there are the regular offers from the bank: extending the life of the account if it is a loan, reaging the account if it is a line of credit.

Short sales can take over a year to do, just something to keep in mind. The more you talk with your creditors the more they will try to work with you on your situation.

The only advice I have for the construction issue is to call your insurance and see if there is any coverage that they can give you.

Good Luck

S.

Our situation is different because we were in danger of losing our primary residence, but I wanted to suggest that you seek a loan modification for the home you live in. The government sponsored program is pretty easy to qualify for, and since it's government sponsored, the banks are eager to help you through the process. They don't want to lose their investment and are happy to take government money! The most important stipulation for you is that it must be your primary residence. In most cases, your bank will send you a packet with the documentation you need to send them to start the process. They will probably put you on a temporary lower payment plan while they process your application which can take about 3 months. They take into consideration such things as reduced income and monthly expenses. They might insist that you see a credit counselor. It's all totally worth the headache. Our application is still in review but we stand to see our payment reduced almost $800, just in interest!

There is also a chance that the lender on your condo has their own modification program that isn't associated with the govt. program. Mine does, but they try to qualify you under the govt. program first, since they don't lose anything that way. Some programs extend the term of your loan instead of reducing the interest rate. I would ask them to put your options in writing, since the whole thing can be pretty confusing. I've also found that you will get different info from different customer service reps. Keep calling and talk to several reps until you feel you have gotten consistant info from multiple sources.

There are also HUD approved housing counselors that can give you more info on all of this and talk to you about options specific to your circumstances. Go to makinghomeaffordable.gov
The site has a link to HUD counselors in your area. It also gives more info on the govt. sponsored program I mentioned. The other thing I recommend is to go to your local DHS office. If you live in Oregon, apply for the Oregon Health Plan for your daughter. Apply for food stamps and/or cash assistance. I never thought I would be asking for this kind of help, but I have always paid my taxes and given to charity when I could. Sometimes you have to swallow your pride and ask for a little help to get through the hard times. I see it as a learning opportunity, and I will never look at the guys with the cardboard signs on the side of the road the same way again. Best of luck to you and your family!

contact your mortgage companies for BOTH homes, try to do a modification on both homes ask to stretch out your mortgage to 40 yrs.....i had my friend do this on her townhome, although she was not ever late on anything, she was able to lower her rate by 2% & get a 40 yr term, this saved her $500 a month & there is no penalty to make extra payments. By doing this on both homes you may be able to save your credit. If this doesnt work for some reason then maybe you should consider letting go of the house & move back into the condo.....But honesty is the key with the mortgage companies.....best of luck

I am a mortagage loan officer for a large bank and my advice is to call your banks and talk to the foreclosure department. You should be able to get a foreclosure stay on your primary residence and a possible modification. Also do NOT pay anyone to help you modify yoru loan! Your bank will talk to you for free. There are lot of companies that are scamming people right now.
On the rental talk to the bank about doing a deed-in-luei. This will get the rental out of your life and you can move forward. You will not be able to do anything for about 7 years with large credit transactions but it will short and sweet, unlike a short sale.
If I can help please feel free to contact me privatly and I am more than happy to help.

You've already gotten some excellent advice. I would add just a couple things. Talk to an accountant knowledgeable about tax laws regarding the various options. You don't want to make a decision and then get hit with a large income tax liability. Anyone who has a condo should have a clause in their own insurance that covers any special assessments. It adds some cost to the insurance, but is more than worth it if something happens. You better check with someone other than your realtor on what the banks can do in a foreclosure. Also double check and see if you signed a personal guarantee on the second mortgage.

Go to your bank. My neighbor is a realtor and he told me there is so much information that people do not know about when it comes to foreclosure.
I just can't remember all the details but I do remember he told me that the banks do NOT want you to foreclose.
They can help you but they have to know that it is a last resort and you have exhausted all financial sources.
When you foreclose, the banks lose too and they definitely aren't in the business to lose money.

Contact Consumer Credit Counselling in your area. Make an appoinment they maybe able to help you. They have helped people work with the banks and their mortgages. Its free to go and see them. Call them first as their is a phony website out there.

Hi J.,

You should really get a lawyer who has expertise in real estate and bankruptcy. Your realator is correct that even on a short sale the bank is still able to come after you for the remainder of the money owed unless they give you a letter stating that the debt is forgiven by the short sale. A lawyer is an expense but he/she should be able to help you determine the best course of action that will have the least amount of ongoing affect to your credit rating and such.

Good luck!

I don't know if our sale would be called a short sale but we sold the house for less than we owed. We then had to pay our lender the difference at the time of closing. We did sell the house while we were current on payments.

Perhaps you can make arrangements with your lenders to write a new loan for the amount still owed that would have payments that you could afford. I definitely agree that you should talk honestly with your lenders to see what they can do for you. Often we end up with a "bum" deal because we're afraid to be honest. I've found that honesty pays even with the IRS. :)

Many years ago one of my friends "returned" a house that he used as a rental to the bank because he no longer wanted it and also did not want to deal with a sale. He said it would mess up his credit for awhile but he thought it was worth it. I don't remember any of the details. Perhaps the house was worth more than the loan. I don't know.

i am in a similar situation. my husband and i have considered options, and have decided foreclosure is the best option. we live in a rather bad neighborhood, want to move before the girls (1 and 3) start school, but the house is crappy, we have suffered from vandalism and its lost 50k in value. its our first home which we have lived in 4 years. we dont have any savings and were strapped to pay the high mortgage. i only work 10 hours a week. we tried to do the loan remod thing that Obama put out there, but the bank wanted to charge us 3000 for it. ha. we didnt want to go into debt more paying for our mortgage. it felt like throwing away money, that we could be saving for our kids future. so we are in the early part. just started not paying last month. its a little scary, all the unknowns... but we dont know what else to do. so, sorry i cant help. but i can sympathize.