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CesEve99
member
short sales
CesEve99
member
how many of you are in this position?
we're considering to actually short sale our home but are scared of the consequences. in actuality, it would either be a short sale or foreclosure that we will go through. we refuse to pay an arm and a leg for the condo/townhome/box we live in when we know its not worth half of what we took out the loan for.
anyways, if you are...if you are going through a loan modification, short sale, or anything related please share your experience or if you care to share privately you can email me: ceseve99@yahoo.com
thx!
This discussion has been closed.
Re: short sales
I just wrote back to you on facebook, but I wanted to share this article as well:
https://homebuying.about.com/od/foreclosures/f/072509_Short-Sale-vs-Foreclosure.htm
I'm in the process of a loan modification (where my interest rate is lower, terms, balance everything else is the same). I applied for it back in April of 09 and just got the paperwork in January. Also, for my bank I was never delinquent or did not need to miss payments to qualify.
Just a note on the short sale route- so many people are doing it the banks are starting to go after people for the difference in what they owe. Just be aware of this since it started this year and it's not always a free way to unload your property.
I have heard this, too, but it depends on how the bank processes the short sale. I don't know the technical terms, but if they write it off and issue a 1099, they legally can't go after you, even though, they may try. I think the best thing to do is have a good lawyer involved who will make sure everything is done properly and consult with them before you make any decisions or stop making payments.
Talk to a realtor you trust and get advice. I know short sales are not easy and can take a very very long time.
We were advised not to even look at them when we were buying our house b/c the banks are so backlogged and it could take months to get an approval. We did buy our house as a foreclosure though and still had to go through a bank but at that point they owned the house. They are very behind, I was just talking to a realtor friend of mine at Alexis' birthday party who was telling me about someone who has not paid their mortgage in TWO years and had not yet gone through foreclosure. Definitely get some good advice.
Ditto! We just bought a short sale and it took 7 months from the time we made an offer to the closing date. But, we really loved the house and location and we knew we weren't in a rush to move.
Yup!! Things are taking really long... some people have lived rent free for 3 years and now is when there is a sale date. It's a long process!
We were also adviced against even going to see short sales. Short sales are the longest sales!
Good luck with whatever you choose.
I would recommend seeking a loan modification. Ask your lender about the Making Homes Affordable plan where they typically reduce your payment to 31% of your income. They only offer this on primary residences. You can also send the bank comparables that are listed or have recently sold in your building/area so they see the value has dropped significantly. They may also reduce your principal balance, but this is rarely done. Each bank is different and some do not want to help you, and lose paperwork left and right. It's a very frustrating process, but its better than losing your home. Perhaps if they modify your payment you can rent it out and move elsewhere, just a thought. If they do not want to modify your loan then I would try a short sale.
Best of luck!
Rach-
Who's your mortgage company? We are finalizing our modification but we did not have to be delinquent......
Chase
ty for your replies.
marisol - ill be emailing you via fb shortly
and for the others - we have boa...we were previously with countrywide. they wouldnt modify our pymts until we were behind on our pymts. so we took the risk, they modified one of our mtgs but only by $200 and its temp for only 4 months...its a long process but one we're willing to take to see where this takes us.
We tried the loan modification route first, but even with a foreclosure defense attorney representing us, the bank STILL turned us down. We have a negative ARM loan on our condo but we never treated it as such...we would always pay more than what we needed to pay, so that we could cover our whole interest amount plus put a little bit towards the principal each month. Well, the bank basically told us that instead of getting a modification, we should just start making our minimum payments (meaning we would be paying less than the interest we owe each month, and the difference in what we don't pay gets ADDED to our principal amount at the end of the loan...ridiculous). We never went delinquent on our payments which I'm guessing is why maybe they didn't take us seriously and refused to work with us. This is why we are resorting to a short sale. It is possible to get a short sale approved without having to stop making your monthly payments (and thus saving your credit), which is what we are going to try to do...but it all depends on how long the process takes. At some point, we may just stop paying while we wait for the bank to approve the short sale.
As for buying a house that is being "short saled"...the house we currently have under contract and are hoping and praying to close on at the end of March is a short sale. We got really lucky though because some OTHER buyers had already made an offer on the house first and the owner's bank had already processed it and approved it, but then the buyers fell through because they were not able to get the financing. The process of the seller's lender approving the short sale is the lengthy, pain-in-the-butt process and the process you have to wait out if you are the first buyers putting an offer on the home. BUT, if you keep your eyes peeled for homes that are listed as "pre-approved short sales," you bypass that whole process. The only thing is that you have to offer identical terms to what the previous buyers offered so that it is only a matter of changing the buyer's name on the sales contract. If you offer anything different, then you still have to go through the whole process of your new offer being submitted to the sller's bank and waiting to see whether the bank will approve it or not.
Adri and Rachel, to answer your questions from the post below...Adri, our attorney told us we didn't have to stop making payments to get the short sale approved. I'm not sure if that's a new thing or if it just depends on what bank owns your mortgage.
Rachel, we are also lucky to have really high credit scores which is why we feel more comfortable doing this. Also, luckily, the note for our condo is only in my husband's name, meaning technically he is the only one that would take the hit. My credit would still stay intact, so if there is something we would need to finance in the next few years, we could still rely on my credit to help us out. We are getting approved for the loan on our new house because my parents agreed to cosign with us, so even though the condo mortgage payments are still considered part of our monthly expenses, we can get approved. The bank doesn't take into consideration that we are planning to short sale the condo, so in their eyes, it's as if we were going to be paying the two mortgages at once indefinitely. If your ILs are planning to help you out by cosigning, this might be a better approach...buy the new home first and try to get approved for that mortgage with your existing mortgage still on your record, but with your IL's added income taken into account, versus having the short sale on your record and then trying to get approved for the new home. Anyway, keep me posted...I wish you the best of luck!
Jen, I agree with you and what you're doing 100%! It's worth the risk!
I know that short sales and foreclosures used to carry a stigma with them because of the hit on the credit, but *IMHO* it's the best thing to do right now and it's just perceived as a financial strategy. In the long-run it's what's going to stabilize the market and bring the cost of housing back to normal prices (prices we would've seen if their had been regular, steady inflation instead of all the speculation that was going on during the boom). Let's face it, the banks received all this bail-out and stimulus money and they haven't helped anyone. Maybe I'm going out on a limb here, but, I think in the future they may face some class-action lawsuits for their bogus loan mods.
I'm on the other side... trying to buy a house. Short sales can be very long and frustrating. We've been looking for over a year and a half and have had offers on probably 5 or 6 short sale properties. If you do decide to sell your house via short sale, make sure that the listing price is approved by your bank and that the short sale process is to. If you list first and then wait for approval after you get an offer, you WILL lose your first buyer, or three.
If you can afford to stay in your home, I'd just keep paying it off. It's frustrating to owe more than your home is "worth," but it was obviously worth that much to you when you bought it, or you wouldn't have purchased it. Don't think of it as how much the market says your house is worth... think of how much it is worth to you.
Regardless of what route you take, I hope everything goes well for you!