1st & 2nd mortgage 2 mos behind

Posted: Mon Dec 29, 2008 10:28 am Post subject: 1st & 2nd mortgage 2 mos behind

I had a job opportunity and we've moved to another state. Our home has not sold, and we're now 2 mos behind on both the 1st - 290K and 2nd 60K. We're trying to work on a short sale, at approx 320K. The home has been on the market for nearly 2 years now. We started at 485K.

Home is located in CT, and we are now renting a house in NC.

Any advice on the options?

rightwaydc · Joined: 29 Dec 2008 Posts: 2 1.64 Dollars($)

I hope you have already contacted the mortgage co. You need to get the price down to about $280,000 for a quick sale. Submit your short sale package to your Mortgage Co. w/contract.
Better yet find an EXPERT Realtor in short sales and let him handle it. The Mortgage Co. does not want to fourclose.

Guest

We've already submitted hardship packages to both the 1st & second mtg companies and were denied - based on the fact that there was no buyer in site.

gmakerley · Posted: Mon Dec 29, 2008 11:58 am Post subject:

rightwaydc is right on in advising you to find an expert realtor to assist you in the proposed short sale. your lender needs to understand that a potential buyer will not pay enough for you to repay your full debt.

as to hardship packages, if you can find a buyer, that'll be a moot point anyway.

Guest

The property has been listed for nearly 2 years. We've had some interest, and thought we had a buyer - who then got cold feet due to the economy. Our listing agent will be dropping us to $335K. We've gone from $485K to 425K to 365K, and now to 335K.

A sale at close to this will cover the 1st, and we'r epretty sure that the bank appraisal will come in at near or higher than what we owe.

Iseee our problem as being with the 2nd mortgage. My understanding is that deficiency rules don't apply to 2nd's? An appraisal that's higher than the total owed on 1st & 2nd would not apply to a deficiency sought by the second mtg company.

jameshogg · Posted: Mon Dec 29, 2008 7:51 pm Post subject:

Hi GJ,

If the short sale satisfies only the 1st mortgage, then the 2nd mortgage holder may ask you to pay off his dues. If you don't pay the dues, then the second mortgage holder may either charge off the mortgage or may forgive it. Second mortgage charge off means that the lender will sell off your mortgage to a collection agency who will in turn collect the dues from you. If the second mortgage holder forgives the dues, there are chances that you will have to pay taxes on the forgiven amount.

Thanks

Posted: Tue Dec 30, 2008 10:04 am Post subject: Short Sale

The 1st mortgage holder will usually give some money to the 2nd, just to get them to "sign off" on the sale. Generally, it costs more to fourclose than to do a short sale, but you need a contract and you need a Realtor who knows how to do a short sale. Taxes on the difference owed and sold can be forgiven by IRS. there is a form you fill out w/tax return.

Guest

1st holder now saying they will take a deed in lieu - and it will be up to us to deal with second?? I thought they had to deal with 2nd if they take deed in lieu?

jameshogg · Posted: Fri Jan 02, 2009 10:52 pm Post subject:

Hi GJ,

When the first lender agrees for a deed in lieu, he will include a non merger clause in the agreement wherein the second lender will not be able to object to the 1st lender's sale of property.

As far as the second lender is concerned, you will have to pay him his dues. If you are unable to pay the dues, the second lender will charge off the loan to a collection agency. The collection agency will then collect the dues from you. To know more about second mortgage charge off, check out the following link:
http://www.mortgagefit.com/know-how/secondloanchargeoff.html#19963

Thanks

Guest

Thanks for the info James.
Frankly - at this point - what used to be our outstanding 700+ credit is shot to ***l. I see no reason to pursue the deed in lieu if the second can collect from me - though many folks have advised me that they'll most likely agree to a small % of what's owed, and charge off the rest. Leaving me with a 1099 that may be forgivien by the feds anyway.
I'm confident my home will appraise high enough to cover most of the 2nd. In CT my understanding is that they can only collect deficiency against the appraised value - not the amount collected at foreclosure sale.

This situation is very frustrating - as we made overtures to the banks when we knew we'd need to short. I specifically asked the 2nd holder to give me some vehicle into which I could roll the 2nd, and continue to make good on the payments. Meanwhile - I could lower the price, cover my realtor, and cover the first. No credit hit, and everybody gets paid.

Do you think I could get anyone at the bank to work with me?? NO!! How much should I care about this now? It seems to me that it's in my best interest to allow foreclosure, and see if the 2nd lender cares enough about a small amount I'll owe them after appraisal is done. Call ma a dirt bag, selfish, deadbeat - but I spent hours on the phone getting bounced from one person to the next - almost begging them to give me a way to shoulder the 2nd in a personal line etc. I got ZIP.

Sorry for the rant - but this situation represents EVERYTHING that is wrong with the banks, and the legal mis-oversight that was brought to us courtesy of our wonderful politicians and beauracrats.

smithsussane · Posted: Mon Jan 05, 2009 12:45 am Post subject:

Hi GJ!

Welcome to forums!

Did you speak for a loan modification with both the lenders? A loan modification will help you in saving the property. In a loan modification, the loss mitigation department of the lender will give you an alternative payment plan through which you will be able to pay off the dues.

I don't think foreclosure is a good option. You may check out the different options that you can try in order to avoid foreclosure:
http://www.mortgagefit.com/foreclosure/17ways-avoid.html

Feel free to ask if you have further queries.

Sussane

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