Posted on: 16th Dec, 2008 01:57 pm
I am currently in the process of a short sale. I took a transfer to another town and my old house has plummetted in value and rentability. We are current on payments but have a major income defeciency and all our reserves have been tapped. The 2nd mort. said they would release the lien for 10% and transfer the loan from secured to unsecured. This does not help my situation of not being able to make future payments. When asked, they have not offered any other options except a reduced payoff amount. What approaches to the lender can I take to actually start a negotiation process? Also, should I continue to scrap together any means possible to pay the mortgage, when it seems inevetable I will damage my credit through a short sale/deed in lieu/forclosure.
hi guest!
welcome to forums!
as far as i can understand your question, the first lender has agreed for a short sale. if the short sale is finalized, your property will be sold by the first lender to recover his debts. but you should note that if there is a deficient amount from the sale of the property, you will have to pay that amount to the first lender.
as far as your second lender is concerned, i think that they will charge off the second mortgage to a collection agency. the collection agency will collect the dues from you. you should definitely negotiate with the second lender so that he forgives the mortgage. but i think he will not forgive the whole amount. you will have to pay at least some part of the mortgage to him.
you are correct that short sale, deed in lieu or a foreclosure will damage your credit. in case of a deed in lieu, the first lender may forgive the deficient amount but the second lender will want you to clear off the debts that you owe to him. otherwise, the lender can place lien on your other properties or can even garnish your wages.
as you are unable to pay the mortgage dues, i think, you should short sale the property and pay the deficient amount to first lender. and if the second lender charges it off, then you will also have to pay the collection agency.
feel free to ask if you have further queries.
sussane
welcome to forums!
as far as i can understand your question, the first lender has agreed for a short sale. if the short sale is finalized, your property will be sold by the first lender to recover his debts. but you should note that if there is a deficient amount from the sale of the property, you will have to pay that amount to the first lender.
as far as your second lender is concerned, i think that they will charge off the second mortgage to a collection agency. the collection agency will collect the dues from you. you should definitely negotiate with the second lender so that he forgives the mortgage. but i think he will not forgive the whole amount. you will have to pay at least some part of the mortgage to him.
you are correct that short sale, deed in lieu or a foreclosure will damage your credit. in case of a deed in lieu, the first lender may forgive the deficient amount but the second lender will want you to clear off the debts that you owe to him. otherwise, the lender can place lien on your other properties or can even garnish your wages.
as you are unable to pay the mortgage dues, i think, you should short sale the property and pay the deficient amount to first lender. and if the second lender charges it off, then you will also have to pay the collection agency.
feel free to ask if you have further queries.
sussane