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pixel2 · Joined: 08 Jul 2009 Posts: 1 1.00 Dollars($)

I lost my job over a year ago and now have an urgent family medical need to move back to my home town (out of state). I'm currently in a short sale situation. This process has been taking quite a bit of time just to get a negotiator assigned. An appraisal has been done. Regretfully, I quit making payments about three months ago and the loan is now going into default. I seem to be getting conflicting answers from just about everywhere as to the process. This is an interest only loan and the lender is Countrywide now B of A. YUK!
I've tried several times to get the lender to consider a loan modification. If this were possible I could very likely rent the property. This would be the optimal solution as not only does the bank get paid, but I don't mess up my excellent credit rating and someone will have a great rental property. (Win-win for everyone, right?) They just won't do it even though my bank account is relatively flush and I have no other debt except living expenses. Anyway...my questions are...

Does a deed in lieu make more sense than a short sale?
Is there a way to negotiate away the banks ability to go after the balance in a short sale?
I've sold stock recently outside of my bank account. Does that factor into what the lender looks at?
Do I need to contact the lender to advise them that I am in a short sale so they do not try to foreclose? (I'm getting letters from them)
Can I pursue a loan modification through a 3rd party without messing up the Short Sale process?

jameshogg · Posted: Wed Jul 08, 2009 7:38 pm Post subject:

Hi pixel,

In my opinion, a deed in lieu foreclosure is a better option as you'll not have to pay the deficient amount to the lender. However, you should note that it would lower your credit score by 250 points. In a short sale, the lender has all the right to sue you for the deficient amount. You can negotiate with the lender but it depends on him whether or not he would forgive the deficient amount. If you are negotiating a short sale with your lender, he would not immediately foreclose the property. If he rejects your short sale offer, then the lender can foreclose the property.

You should have applied for a loan modification prior to the short sale offer. If you apply for a loan modification now, the lender may stop considering the short sale request.

Thanks

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Short Sale - Confused & Worried