We’re in a dire financial predicament with no way out but to give up our home. My in-laws live there also (although they have no legal rights to the property) and all parties have agreed that we can’t keep going the way we are as it’s causing severe tension within the household. We only just scrape the money together to pay the mortgage a couple of days before the 30 day mark is up, so we’re not at the foreclosure stage. YET. We have no second mortgages or anything, and we are unable to refinance at a better rate.
I’ve done a lot of reading about short sales or deed in lieu of foreclosure, and I can’t figure which option would be best. All I’m really worried about is my credit and tax consequences. Which would have the least negative impact on my credit?
Also, what happens if the BPO comes in a little higher than we owe? The market is bad where we are, and we have a lot of repairs that we can’t afford. A local realtor recommended putting it on the market for $225K, and we owe $227K. The home appraised at $239K in Aug last year but has since had problems (seems like just about everything!) that we can’t afford to fix. He was also very negative and didn’t seem to want to waste his time trying to help us with a short sale.
Please, please take this comment as what I would do but not a recommendation to your current situation.
If I understand you correctly, your credit is still good as of today and your current home is about to bring you into bad credit status and that is what you are trying to avoid?
There is no equity…house has lots of repairs … you can barely affort the payment …
I wouldn’t be talking with real estate agents rather, you should be spending your time and efforts in talking to investors and your lender. If you find a savvy investor, he should be able to put together a short sale to purchase your home; however, you have to be careful in that, if short sale was successful, you are not responsible for the remainer balance from the short sale.
I would gear down to more manageable mortgage while your credit is still good.
Yep,
What every arrangement you sign with any investor,
please make sure that it states that this deal will depend on the lender not pursuing a “deficiency judgement” on the mortgagor.
You might still have a tax consequence via a 1099, but
that is less damaging than a deficiency judgement.
May be the lender will help you with a loan modification.
Good luck
-Krish
Yes, we are still making payments, only just. There was one time recently that it was paid one day over the 30 days, and my credit score took quite a beating, although it still isn’t horrendous. If we stay, that’ll happen more often. The lender will still do a short sale although we’re not in foreclosure, (assuming the figures work for them, of course) but their condition is to get it listed on the market, although they have no time frame as to how long it needs to be listed for.
We’re desperate to get out as we also rely on other people’s paychecks (in-laws) to pay our mortgage and it’s their financial situation more than ours that’s causing all this. Loan modification would be the last resort for us because I see WWIII happening if we don’t go off on our own somehow.
A while ago, I called an investor and they gave me a general offer of $170K at the very most, and that was before they saw the home (and it’s many problems). It was before I knew about short sales so I told him no, as it wouldn’t even be close to covering our mortgage. I guess I’ll call him back!
a short sale is better on you’re credit rather than a foreclosure. in ca once 2 payments have been missed, they would first send a notice of default and then start foreclosure proceedings thereafter.
a house in ca must be listed first. once an offer comes in the lender is the one who makes the calls as far as negotiatin, acceptance, and so forth. you need to contact a real estate agent who specializes in short sales and they will call the bank and do all the necessary work for you. your agent can create a letter to the lender stating financial hardship. a lender/bank would rather sell it as a short sale rather than go into foreclosre. if you need a referral for a real estate agent in your area just let me know where you live and i can have someone contact you.
Have you tried selling it yourself with 10% down/owner financing? Sweat equity.
Someone here had an ad they used to sell a home quick. looked pretty good to me.
