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lajazzguy · Joined: 12 Mar 2009 Posts: 1 1.94 Dollars($)

I hope you can help because I'm not sure that my real estate agent (a friend) knows everything I wish she knew.

I owe $288k on California Condo now worth maybe $165k. It is not my principal residence. Before I lost my job I rented it out to tenants so that I could live (rent myself) in a better neighborhood. Having lost my income, I now can't keep paying the mortgage ($600 more than rent collected) and my own apt. rent. I am beginning the process of a short sale. My first mortgage holder has purposely, I believe, dragged their feet on my request for approval on a Short Sale in their Loss Mit. Dept. I finally got the appraisal out there today and also listed it in MLS today.
Specific Questions:
1) If an offer is made for $160 is the First Lender likely to accept and not bring a Deficiency Judgement (I'm in California)?
2) Can I ask my 2nd Lender ($30k owed) to modify my loan and make it an unsecured loan? Can I get a better rate right now from my 2nd (Di-Tech) just by asking. Should I even tell them what's going on before I start listening to short sale offers?
3) How bad will a short sale affect my credit?
4) How long will it take for my 1st Lender to accept a buy offer while I'm still waiting to get the whole thing off my books? (The 3 credit reporting agencies know that I'm 4 mo.s behind now and that's got my credit card rates going up).
5) Can I move back in my condo (tenants lease ends in 40 days) and then take advantage of the Foreclosure Relief Act allowances for modification at 90% of current value?
Thank you!!!!!!

Guest

You have to work with your second mortgage company. If the second mortgage company will not agree to the short sale or work with you on your loan then the first mortgage company will not accept the short sale.

I'm in the same boat myself.

You could possibly move back in and take advantage of that. I just submitted harship packages to my first and second company ... I'm really nervous about what my second mortgage will say because I've tried to work with them before and they were not nice.

I'm also 150k upside down on my loan and can't figure out what to do. I wish I could just refi it as is into 1 loan.

jerry · Posted: Fri Mar 13, 2009 5:15 am Post subject:

Hi lajazzguy,

If you are in a deficiency judgment state, the lender may pass a deficiency judgment. But generally lenders do not do that. You can ask your 2nd lender to modify the loan. You need to send them a hardship letter informing them of your present situation and why you want to modify it.

A short sale will definitely hurt your credit in a negative way, but it is less damaging than a foreclosure. It drops your credit by only 75-100 points as compared to 250 points in case of a foreclosure. If you are going for a short sale, it generally should not take more than three months from its initiation. As far as Mortgage Forgiveness Debt Relief Act is concerned, you can avail of it only if the property is your principal residence.

Thanks,

Jerry

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