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Ok, first off: I have no credit card debts currently. The only debts I have are a student loan and a mortgage. I want to do a short sale for my house for the following reasons:
1. I owe over 50,000 on my mortgage than what the actual value is. I have absolutely no equity. By the way, I have two lenders. One is for the main lender, the other is for the second mortgage (the down payment if you will).
2. The state I live in (Michigan), it has a high unemployment rate. I am one of the unemployed. So that means my unemployment will run out soon. I have been keeping up with payments, but once unemployment runs out, no more payments.
3. I have job prospects and opportunities out of state. The house I have is keeping me from becoming economically viable.
4. I have about 10,000 saved up. I don't want to burn through that since that would be foolish. I also have some retirement which I don’t want to “borrow” from it, because that would mean penalties and taxes. Since my state has such bad unemployment, I don’t know when I will be able to “pay back” my retirement.
I want to know, can I actually do a short sale? Do I have to provide a hardship letter to the relater (or to the lender)?
I also heard that through the end of this year, if you do a short sale, the loss will not be considered income as long as the mortgage was not used for anything other than your house? Can you confirm this?
Should I cash out my savings so that the lenders’ can’t go after it?
Anything else you could tell me.

adonis · Posted: Sun May 09, 2010 11:54 pm Post subject:

Hi cads,

As you want to get rid of the property, it would be better if you could contact your lender and apply for a deed in lieu of foreclosure. This will not only help you in selling off the property but you won't be liable for paying off the deficient balance. You will have to write a hardship letter to your lender informing him about your financial situation and apply for the deed in lieu of foreclosure.

However, you should note that a deed in lieu of foreclosure will lower your credit score by 250 points. You won't be able to qualify for a loan immediately after it. You will have to wait for 3-4 years in order to get a loan.

Posted: Wed May 12, 2010 9:46 am Post subject:

Hi,

If you want to get rid of your loan and foreclosure then deed in lieu of foreclosure would be a better option for you. In this process you can get out of a home loan easily and it is less damaging to the borrower's credit. The lenders accept deed in lieu because they can take control of the house immediately instead of letting the borrower to stay in that house without paying any money during the foreclosure process. However, you need to qualify for the deed in lieu of foreclosure. Consult with a good attorney and send a hardship letter to your lender.

rita2 · Joined: 23 Apr 2010 Posts: 286 51.03 Dollars($)

Hi,

If you want to get rid of your loan and foreclosure then deed in lieu of foreclosure would be a better option for you. In this process you can get out of a home loan easily and it is less damaging to the borrower's credit. The lenders accept deed in lieu because they can take control of the house immediately instead of letting the borrower to stay in that house without paying any money during the foreclosure process. However, you need to qualify for the deed in lieu of foreclosure. Consult with a good attorney and send a hardship letter to your lender.

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