Major Help Needed


I’m currenlty in a dilemna and need some help. I have an investment property that has an ARM and two mortgages. The first loan amt. bal. is 130,000.00 and the 2nd is 32,000.00 which makes the mortgage roughly 1475.00. The property is being rented out, but I have a negative cash flow of about 350.00, so I’m not sure of what options I have at this time.

I was told that I may be able to do a short sale, but I would have to miss about 3 months worth of payments before I could do that. My credit score is pretty decent, and I’m not really interested in messing it up. I have tried to refinance but I"m always getting the run around. I guess I’m just looking for any good advice on what I should do.

How much is the property worth in today’s market? are you able to sell it just to break even?

doing a short sale won’t necessarily mess up your credit score- its all dependent on how the lenders and report it to the credit bureaus, although I believe FICO is working on getting some standardized rules set up so a short sale won’t automatically ruin your credit…

I’m not sure that I’ll even be able to break even. It looks like the values in the area have dropped. Everytime I think about it, it want to smack myself. I want to invest in real estate, but I made a stupid decision. Lesson learned, I’m just ready to move on from this and start over again.

I hope they adjust FICO scores due to the state of the market now.

DO NOT MISS PAYMENTS! This is a common misconception, by law the lenders must review all applications for short sales. In my office several agents as well as myself have completed short sales for homeowners that are not behind. If you are interested in doing a short sale the bank will take a look at your finances and to make sure that you are having trouble making your payments and that default is imminent and if you have a good offer they should approve you. Different banks have different rules and the same goes for investors.

Let me know if you have any questions! Good Luck!

You don’t have to miss payments. We are purchasing a short sale house right now and in negotiations with the lender to buy this house. The homeowner hasn’t missed a payment and their credit score is great.

Find an investor in your area that buys and negotiates short sales. Call your local REIA and they can refer you to someone. Good luck.

Do you think it will be harder for me to short sale being that I have two mortgages on the property? I’m not sure how it is exactly going to work for the 2nd mortgage.

Having a second mortgage does not make things easier, there are many depending factors on if you will have an easy time with the second. If your first and second are with the same lender this should make things easier than if it is with a different lender.

Make sure that you know having a second mortgage should not discourage you from completing a short sale. The office I work in processes short sales and 95% of the completed short sales have a 2nd.

If there is a second all you will need is to have someone who knows what they are doing and you should be ok.