Short Sale or deed in lieu or foreclosure?

My wife is on the note and we are both on the mortgage/deed on a home in Florida. We have never been late on the mortgage or credit cards, but are realizing $13K per month is putting us in debt/bankruptcy that we can’t get out of.

We owe $360K with Homecomings and $130K with SunTrust. Houses are listed for $425K-$499K…realistic value is $455K now. We just put in a pool and its on a lake unlike the one for $425K. We also owe $90K in credit debt, so a Ch. 13 bankruptcy is emminent. Can’t do a CH 7 (lawyer said).

My 1st mortgage is due on April 1st (not 30 days yet) and my 2nd is due on April 20th. Should I pay for my 1st mortgage so I can buy more time to try and sell the house? Am I just wasting my money that will be needed to move? The 1st will get their money back, but the 2nd is screwed, so will the 1st push foreclosure really fast? The 2nd said to send an offer and they will respond quick because they know the market and how bad it is.

What options would I have? I want to make sure we don’t owe any money after the short sale is finished. Will there be a judgement on my credit (I am not on the note and all debt is with my wife). How many months before they start foreclosure? Will CH 13 bankruptcy slow it down? Any and all advice will be much appreciated. Know of any investors who may want to purchase my home? My wife is a realtor…will this affect her license? Should we have someone else list it or do it herself. I am sure they won’t allow her to make the commission.


I don’t see how this would affect the license of your wife. It doesn’t sound like a crime to me. Insofar as her not getting a commission, why not? Commissions are paid to brokers not agents. Brokers pay agents, the sellers don’t.

Worry about the 1st not the 2nd. If the 2nd forces a foreclosure there probably won’t be enough to pay off the 1st so the 2nd will lose anyway - that’s why interest is higher on 2nd mortgages,

13K per month on 500K? Maybe 1300.

How can your wife be on the note and both of you be on the mortgage? The note is part of the mortgage.

Ch. 13 will postpone it, so long as you keep up the payment plan with the trustee, and the banks don’t get the mortgages set aside. But once you’re out of the bankruptcy, you’ll be back in the exact same spot you’re in now.

I think Florida’s a Power of Sale state, as opposed to judicial. If it is, it could all be over 120 days from April 1st.

If you’re not on the note or any of the debt, your credit shouldn’t be affected, you’d need to pull your credit report a couple of months after and find out.

You should have someone else list the property just to show impartiality to the bank, but if they have no objection to your wife listing it, then she may as well.

Options? Sounds like you already know the answer, and at least you’re being realistic. If you can find an investor, see what he can do, if not, or they fail, do the DIL. The investor needs to know how to negotiate the deficiency judgement away, if you do DIL, you’ll have the deficiency judgement anyway (probably).

Email me if you need more help.

This is not legal or financial advice, consult a professional. I believe you already did.

the 1st will get paid no matter what because I only owe $360K to them and the property will sell for at least $430K at a distress sale. The 2nd is who is in trouble…but should be able to recoup 70K or so on a $130K mortgage.

So, I need to get a short sale package from the 1st as well? The 2nd just said they need the contract, comps, and HUD1.

Do they normally pay the realtors 6% of the sales price? What about the closing costs? Title fees, etc? We want to list the house, but don’t know what to list it for, since we owe 490K and comps are 450K range.

The 13K per month was all our bills total (90K in credit debt included, daycare, etc)…mortgage is $4100 PITI. She is just on the note…we have to be on the mortgage in Florida together since were married. I heard that I am screwed if they foreclose because I am on the mortgage and can’t get off (quit claim deed off does not help either)…right?

I’m not too good on FL law, I’m in PA. But it sounds about right as far as the credit goes.

If you’re paying the first in full and shorting the second, you only need the SS package for the second.

You can list it for whatever you want, but to get it moved in 90 days, it would have to be well below market.

The investor buying it will have to negotiate costs, including commissions.

I was wrong, Florida’s a judicial state, so when you go 90 days behind, you have about 6 months to the sherriff’s sale.