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mikesworld9 · Joined: 30 Mar 2008 Posts: 3 1.97 Dollars($)

I live in Michigan and was just laid off.
I've been just barely making it for the last 2 yrs.
My house has been for sale for 10 months.
I owe appox. 125,000 on the first. 45,000 on the second.
I'm single, getting unemployment, but this isnt going to cut it.
I also owe 11, 000 on credit cards. I'm single, 55.
My credit is still good. I cant believe I havent been late yet,
unemployment is barely half of what I was bringing home.
This is going to come to a head real quick. Suggestion please....!!

smithsussane · Posted: Thu Dec 04, 2008 7:15 pm Post subject:

Hi mikesworld!

Welcome to forums!

As far as I can understand from your question, you have two loans. You want to short sale the property now as it has become difficult for you to pay the loans. It depends on the discretion of the lender as what they will do. If you short sale the property, you will have to pay the deficient amount to the first lender. Your second loan will also become due in that case and the second lender will either ask you to pay it off or he will charge off the loan. Charge off means that the second lender will sell the mortgage to a collection agency who will in turn collect the dues from you.

If you cannot pay the deficient amount to the mortgage lender, they can place liens on other properties that you have. In my opinion, you should first speak to both the lenders and see if they can offer you a loan modification. If not then you may try out short sale.

As far as credit card debts are concerned, you can either go for debt consolidation or debt settlement. In a debt consolidation, the interest rates will be reduced whereas in debt settlement your payments may be reduced by 40%-60% depending on your situation.

Feel free to ask if you have further queries.

Sussane

Guest

Thanks Sussane for your advice!
I know there are programs to help avoid forclosure.
But I need to get employed again.
Even with a govt. program no one is going to write me a new note without a job.
I'm not sure I can get another job that pays me nearly what I was making.
Is there ever any benefit to going through forclosure?

adonis · Posted: Sat Dec 06, 2008 12:27 am Post subject:

Welcome mikesworld,

As far as I know, foreclosure will badly affect your credit report. It will lower your credit score by 250 points. I don't think there are any benefits of foreclosure.

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My second is an intrest only loan. If I short sell, will they sue me?