As I have said all along over the past couple years, banks are motivated by different factors than a traditional seller. A potential retail buyer (or "nester") is unlikely to know exactly what those motivating factors are. If the note has been sold on the secondary market, and many have been, then it's the note holder & not the servicer making foreclosure/short sale decisions. Possibly, there are other factors such as the current borrower/owner having other outstanding loans with the bank that adds another wrinkle. Or, it could be how the bank is handling their accounting that makes the difference between short sale & foreclosure. It's really a fruitless process trying to second guess what they're doing & even more so...why. In many cases, due to legal reasons, a lender will decide they need to foreclose & due to confidentiality restraints they aren't supposed to discuss those reasons with you, a potential buyer of the distressed property. Another potential reason to not accept an offer from a retail buyer...they have sold a "block" of REOs to an invester & the particular property you are interested in is contained within that block. The lender has to foreclose to clear title before completing the transaction with the investor. We're seeing many more block invester sales now than 6-months ago. Anyway, it really is wasted energy trying to project your logic onto an institution that has a larger picture as their focus instead of an individual sale. Cash or financing? Well, there's financing & then there's "financing". Cash is cash no matter where it comes from. If you present an offer on a distressed property accompanied by a Commitment Letter you're set to go when you find a property that suits your needs. If you, instead, submit a Pre-approval Letter...well, that's really not worth the paper it's written on. For instance, we have an open Commitment Letter from our bank that allows us to purchase property(s) up to a certain amount based on our personal guarantee (no collateral). After we close, we give a first mortgage to our bank releasing the personal guarantee portion of the Commitment for another property purchase. That loan may contain up to a certain number of these properties obtained via just personal guarantee at any one time. How do you get a loan with just a personal guarantee? Well, again as I've been saying for a long time here, it pays large rewards to develop a "relationship" with a bank over a period of years rather than always shopping for the elusive "lowest rate, lowest fees". All I have to do is phone my bank & tell them I'm submitting an offer on such & such property & need a check in whatever amount on the closing date...I've got 45 days from the funding date to provide a lien. We've earned the bank's trust. It's a win-win for both of us. brickeye, "Let them stew a few more weeks and put in another offer through my attorney." I can assure you nobody at the bank is losing sleep over your offer & they are certainly not in a "stew". Executive management at the bank is entirely focused on the big picture. How a particular property fits into that puzzle only the bank knows. That's one of the reasons David, me, & others harp here regularily that to purchase a short or foreclosure from a bank requires a completely dispassionate approach. Interjecting what seems logical to a "nester" or even the small investor is almost guaranteed to be not relevant to the bank. I stress, again, the bank's need to focus on not only a larger picture but a different picture entirely. The large lenders holding tens of thousands of these bad loans have set-up varying proccesses to move that inventory off the books. But, even so, at any given time a single property may (or may not) fit into the "guidelines". A property's classification can change overnight suddenly making it difficult, or impossible, to purchase. For example, the bank has multiple loans to the same borrower (CC, mortgage, HELCO, car, boat). A restructure agreement is reached with the borrower & foreclosing on the real estate is necessary to clear up title. Or, a borrower sues the bank. That would halt everything until bank counsel has had an opportunity to review the validity of the suit. There are just so many reasons a bank suddenly decides to not offer a short sale...it's impossible to list all of them. I'm far more amazed at how many are actually closing than the fact some get stalled out mid-process. /tricia

I live in Florida, in Miami specifically. Jane please understand that one HUGE factor, aside from any of the technicalities you are trying to figure out, is that this state is absolutely inundated with problem mortgages, underwater owners, short sale and foreclosure properties. And because this state is one of the ground zero areas for the housing crisis it is also swarming with vulture investors which are individuals or groups or investment firms looking to buy distressed properties at a deep discount (usually condos but sometimes land or SFH complexes), individuals like you and your husband, international speculators looking for cheap vacation/second home properties and any number of shady characters looking to feed off the detritus of all the above activity. In other words, it is a royal and enormous mess down here in Florida right now. Yes, there are certainly good deals to be had. But as others have warned you it is NOT a situation you can or should expect to manage according to whatever the letter of the law might read. Especially living in another state with no knowledge or insight into Florida real estate. This isn't meant to be disrespectful or rude but you as an individual contemplating a fantastic Florida bargain house are one of literally millions thinking the same thing. Believe me, if it were super easy we residents would know about it. It ain't. Good luck but please be wary, be careful and keep educating yourself.

It would help to know in what context the word judgment was used.

Hi ML, I think you're getting unfairly beat up. Your guy did the same thing that a lot of people did- they bought at the top of the market, thinking it was a good investment. Right now you have a "paper loss", but there is also the real cost of paying a mortgage for $200k+ vs a mortgage of That said. Truly, this is a "good" problem to have. When you and your DH look back on this years from now, you will think about how you had to deal with a place that is less than perfect and sold some land instead and you'll smile about your youth. You will be thankful that you could afford the mistake and that you weren't bankrupted or foreclosed upon. This is still a problem, but it's a problem that is livable. You aren't facing cancer, injury, etc. In a few years it might make more sense to rent because rents generally are rising now. In fact, this might eventually turn into a cash cow if you ended up renting it. You might end up making much more money on it then you would have if you could short sell it now- plus there will be costs associated with a short sell, even if it were possible (it sounds like it really isn't.) This is just the start of the story for you and your DH. Don't let this come between the two of you. There are all kinds of ways to have fun with it and make it a positive. My FIL is a contractor- when the crash started, he reno'd his kitchen and bathroom and took a lot of before/after pics. He started a website for his business with the pics. His wife was delighted to have a new kitchen and bathroom, and he picked up business. Look for the win-win. You're smart and young, it gets better!