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Short sale vs foreclosure or bankruptcy

Posted on: 22nd Jul, 2008 05:57 pm
we live in florida,

we have primary residence with 2 loans. (80/20)
house values have decreased by 40% and we can not make payments anymore after my arm adjusts.
both my credit score and wife's is above 800. have never missed a payment.
would do foreclosure, but afraid of deficiency judgement.
what would be better bankruptcy, deed in lieu of foreclosure or short sale.
also paying on 2 cars and want to keep them, and have $ 7,000 in credit card debt.

help.

can i pay a lawyer to negotiate for me?
You should not get a deficiency judgment this or next year if you go into foreclose as that rule been suspended for now
Contact your lender and tell them your problem, perhaps you can negotiate something like a rate freeze
talk to an attorney if you have to
Posted on: 22nd Jul, 2008 10:16 pm
hello capablanca,

please contact your lender!

you do not want to go into foreclosure by getting behind on your payments. foreclosure, bankruptcy and deed in lieu, are a big hit on your credit score.

there are several workout plans available to you with your lender. you may ask for a loan modification. be sure to speak to someone in the loss mitigation department at your mortgage company. let them know your situation and be sure to mention that you need to be on a fixed rate instead of the arm.

you may review a free step by step guide to mortgage problems at home-buddies.com. just remember that your mortgage company does have options available to you, besides the options you listed. and you need to choose the option that is going to help protect your credit score.

let us know if there is anything else we may help you with.

good luck.
Posted on: 23rd Jul, 2008 06:47 am
Hi
I don't have so much idea regarding this subject. Just I suggest you to take steps accordingly.





[Link deleted as per the forum rules]
Posted on: 26th Jul, 2008 06:23 am
stop the press…congratulations capablanca you should be one to the beneficiaries of the new legislation about to be singed into law by president bush. earlier today congress had a special session to approve foreclosure relief legislation.


this will allow you to refinance your home at 90% of its current appraised value. since values have dropped by 40% in your area your lender would prefer the new loan rather than risk taking the home back. the law will not be affective till october so hang in there till then and stay in touch for updates on how you can refinance. :d
Posted on: 26th Jul, 2008 06:41 pm
Is there a free way consumers can use to determine the current home value without paying for a appraisal
Posted on: 19th Dec, 2008 06:55 pm
Welcome kawasaki,

As far as I know, there is no free way to determine the appraised value of the property. Property appraisal will be done by an appraiser.
Posted on: 19th Dec, 2008 11:36 pm
Our outgo for 3 mortgages is $7000.00 and our income is $7000.00. The two houses that we do not live in are worth less than what we owe. The one we live in we cannot afford $4200.00 a month payments. My husband has been making all our payments from our two equity loans - one tied to the house we live in and one to another. We've been trying to sell the house we live in and are trying to short sale the others. Any better options?
Posted on: 04th Feb, 2009 09:07 pm
What you need to do here is, talk to the lender about a deed in lieu on one of the houses. Then try for a short sale on the other. If a short sale isn't possible, then try to do a lase purchase transaction on the other property. I know it will take some time before you can actually complete all these. But for the time being, request the lender to suspend payments for a while.

When you start paying again, the dues may be added to the loan balance but by then you'd be getting rid of 2 other houses or making some kind of arrangement so that you can earn from them.

Good luck
Posted on: 08th Feb, 2009 04:38 am
i recently completed a short on a home that was on the market for almost a year. there had not been any offers and i owed more on the mortgage than the home was worth. my relator told me that the short sale would allow me to close the sale with some affect on my credit but it would recover. when i got to the closing -- they indicated that the second mortgage would not be paid off ) it was $50,000. they indicated the house would not sell unless i agreed to pay off the second mortgage. the realator said sometimes the bank will make you pay sometimes not. well the bank wasted no time - and is now calling and wants the 50,000. i can probably make some of the payment ( they want 450 .month) but i still have obligations to another mortgage that i own with my partner. i have only lived in the house for 7 months. can they take the house if i do not own it by myself? what would the impact of bankruptcy be on my partner who put the down payment for the current house? your response is appreciated.
Posted on: 01st Apr, 2009 07:56 pm
Hi jimbo,

If you do not pay the dues of the second lender, he would have the right to charge off the mortgage or place lien on your other property. Yes, he can place lien on the property that you own with your friend. This is because you have ownership rights to the property.

If you file bankruptcy, your partner would not be effected but yes, the property can liquidated to pay off the creditors. However, as your friend jointly owns the property, he may get his share of the amount.

Thanks
Posted on: 01st Apr, 2009 11:17 pm
hello everyone. my husband has recently lost his job. currently we have two homes one of which we own completly and the other one we have big morgage. my husband is thinking of giving the house back to the bank and moving back to the other house we have payed off. can they take our payed home away? what would be a better choice for this situation give the house back to the bank, refinance, wait for foreclosure??? a little guidance will be greatly appreciated.
Posted on: 09th Apr, 2009 12:03 am
Hi Minnie,

If the lender forecloses the property, then he can place lien on your free and clear property in order to recover the deficient amount. In my opinion, it would be better if you could inform the lender about your situation and apply for a deed in lieu of foreclosure. Though your credit will be badly effected, the deficient amount resulting from the sale of the property will be forgiven.

If you are interested in saving the property, then you can apply for loan modification.

Thanks.
Posted on: 09th Apr, 2009 04:11 am
You all need to seek a lawyer to get the correct explanation on the effects of a short sale, foreclosure and deed in lieu for your particular state and your specific situation. A deed in lieu of foreclosure does not wipe away the debt when the propery is sold. Make sure you understand the difference between the lien on the property held as the collateral for the loan and the promissory note that was signed that says you promise to pay back the loan. There are too many folks who know just enough to get people into trouble, also do not listen to the bank they are only going to give you options that work for them.
Posted on: 19th Jun, 2009 08:12 pm
wHAT EXACTLY IS THE DAMAGE TO ONES CREDIT WITH A SHORT SALE 80 PTS...100 PTS.... AND HOW LONG IS THE RECOVERY! IF SHORT SALE DEED IN LIEU OF FORECLOSURE AND FORECLOSURE ARE ALL THE SAME EFFECTS THEN WHY DOESN'T EVERYBODY JUST FORECLOSE.
Posted on: 26th Jul, 2009 08:42 am
Hi Mofun

After a short sale, the credit rating may go down by 80-100 points. After the short sale, you will not be able to get a mortgage for the nest 2-3 years. Moreover, the short sale will remain on your credit report for 7 years as any negative item.

In a short sale and a foreclosure, the defaulter would be liable to pay the deficient amount resulting from the sale of the property. In case of a deed in lieu, you won't be liable for the deficient amount. However, both deed in lieu and foreclosure will lower your credit rating by 200-250 points.

Thanks.
Posted on: 27th Jul, 2009 02:01 am
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