Any experiences with Short Sales

bleighMarch 16, 2011

I posted on the household finances with my situation. Not alot of activity over there and was hoping maybe some of you have any experiences/advice to share.

Our situation is not one of financial hardship. My husband eyesight has deteriorated over the last year. He has a corneal disease and his eyes have rejected the contacts that are basically the last option before cornea transplants. Right now he's just barely legal to drive in the state of Georgia with the lenses he can tolerate. He commutes anywhere from 2-4 hours a day depending on Atlanta traffic. We have to move closer to his job for his safety.

Our house has been on the market going on 7 months. We just lowered by 10K to $139900. Short sale down the street closed for $110000. Our house still needs about $15-20K in updates (roof, remainder of Louisiana-Pacific siding, HVAC and windows). These items still work, but will be noted by any inspector. We are listed for $5K less than what we paid and we have sunk several thousand $$ into this house. We are already listed at our rock bottom and can't go any lower...it'll have to be full offer at this price and I'm not confident that's going to happen.

I spoke with Wells Fargo about the short sale process. The rep told me we would qualify for hardship short sale, but would have to move first and then get behind in our payments. The rational is that we can't afford two carry two households. That's pretty scary. Anyone have any experience working it out with their bank to stay current on payments, but just take an offer lower than the payoff balance? I'm learning that each bank is different, but maybe a real estate lawyer could negotiate some of their terms??

My husband and I will seek out legal advice, but in the meantime I'm trying to learn everything I can. Thanks for any advice offered!!

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lyfia

What are your options for taking out a personal loan or using some other line of credit to make up the difference to pay of the existing mortgage?

Then at least you can sell and move. Yes you'll still have to pay what you owe on the line of credit, but it is an option since your not having a financial hardship.

    Bookmark   March 16, 2011 at 2:28PM
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bleigh

We already have a personal loan that we took out for the house and the bank will not increase it at this time. We are planning on using our tax refund and beefing up savings over the spring/summer to see if that might give us enough to cover a difference should we get less than full asking price.

    Bookmark   March 16, 2011 at 2:57PM
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sylviatexas1

I think you need to talk this over with an attorney, maybe a bankruptcy lawyer;
it sounds like you're planning to spend every penny you have or can get on this house, & then count on the lender to approve a short sale.

& if I were in your shoes, I'd want to know why the lender insisted on my moving out before making a commitment to accept a short sale;
I'd be afraid that the lender wanted me to move to make it easier to take possession at foreclosure.

I wish you the best.

    Bookmark   March 16, 2011 at 3:27PM
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brickeyee

If you have a short sale it may be very difficult to get another mortgage.

The advice to purchase first may have been based on that.

You need to talk with a lawyer about your options.

Unless there is a law prohibiting it (some states have them, AKA 'non-recourse') the lender can always sue you for a deficiency from a foreclosure (part of the short sale process is getting this option off the table).

    Bookmark   March 16, 2011 at 4:14PM
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sylviatexas1

sorry, re-read part of your original post;
no lender ever agrees to accept less than the balance as payoff if the mortgagor is current on payments.

As long as you can make the payment, they'll keep taking it.

I don't think the lender told OP to purchase another house, just to move out of this one.

& that sounds like the lender is manuveuring the homeowner into a position favorable to the lender & disastrous to the homeowner.

Short sales & foreclosures are much too important to your future to go by what we can offer you on a forum;
please get good legal advice as fast as you can-& before you agree to anything with the lender.

I wish you the best.

    Bookmark   March 16, 2011 at 5:52PM
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bleigh

My husband and I are getting referrals for real estate lawyers through a couple of his lawyer friends that practice in other areas. Definitely going to get legal advice before attempting SS. I agree the advice from the bank was concerning. We are not planning on buying another home for at least a couple of years. We are working on becoming debt free and want to have a substantial down payment for the next house. Also want to have freedom to live in a couple of areas closer to husband's work before deciding where to purchase. We do live in a state where they can come for the balance.

Guess I was just hoping someone had been through something similar and could share some of their experience.

    Bookmark   March 16, 2011 at 6:08PM
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LoveInTheHouse

I'm real sorry you're going through this. I don't have any experience. I just wanted to say that I hope everything works out the way you want.

What I always tell my friends is, "Don't forget--the bank is not your friend. Don't trust them!"

    Bookmark   March 17, 2011 at 12:12AM
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