Can Anyone Tell Me What to Expect from a Short Sale or Forclouser?

I am in Illinois and a neighbor recently went through short sale. His son got really sick and medical bills went through roof. Pay the bills to keep getting care or pay the mortgage. He did work with the lender and they agreed to short sale the property if necessary. It was listed as possible short sale. It did sell short by about $10,000 but they did not go after his car or anything like that and did not garnish wages. He was told though that he may have to claim the amount short for taxes and is going to be looking into if he qualifies for that program where they waive it in this economy. Awful thing is the hospital was willing to work with him but could only go so far since the bills are going to keep coming but the bank would not let him fix his mortgage so he could maybe make interest only payments for 3 yrs. His son is in recovery and doing really well but has a year or so of therapy left.

My husband and I went through a short sale last year, and as long as your mortgage company sets the price and agrees to let it list at that value, you will be fine. They didnt take any of our other assets. We were told we have to pay taxes on it, but due to my husband being laid off from work for 6 months we proved unable to pay it, so all was fine. (we sold ours for $28,000 less than was owed on it). It was tough, but it will pass. All will be fine!

We just went through a short sale this past year. Similar circumstances, and we had 2 mortgages. When we put the house on the market we sought a short sale specialist through www.debtkid.com. She was amazing and handled the entire process for us. They can't take your assets or 401K, however they will use these values to determine if they will expect you to hold soft note, which is a loan after the sale, for an agreed upon amount. You will have to do a hardship letter to the mortgage company, and wait a long time. We had a really patient buyer and it took 6 months from their offer. Bankruptcy is really a last option, because you can recover from the short sale credit wise in 3 years time. Bankruptcy & foreclosure are 7-10 years. It is a stressful process, but proved to be worth it for us. Keep in mind it costs the mortgage companies more money to foreclose on a house than it does to short sale. Because this is part of a relocation, the process should go well for you. Try to rent your out of state house, our realtor helped us do that. We actually rented to the buyer. It helped cover the costs. The short sale doesn't destroy your credit, it is the missed payments. Don't worry about the final sale price, just let the bank review it. If you have missed payments, it should go faster for you. One of our banks refused to look at the short sale proposal until we missed. Good luck. I happy to give more info if you need it.

With any luck they can short sell the home for what you owe, assuming you have had the house long enough to have some equity in it. If not, talk to lawyer.

I'd be really surprised if they could go after your other assets for the loan. A mortgage is a secured loan. The collateral you put up against the loan is your house... if you default they have the right to take your house from you, not everything you own.

My friend just went into foclosure a few months ago (and if my ex keeps skipping mortgage payments I might be there in a few months too). It will ruin your credit, but they shouldn't be able to take more than the house. Bankruptcy seems pretty extreme to deal with ONE bad debt (and that way you WOULD likely have to liquidate your other assets).

Good luck.

T.

Generally they go after those other things if you have an unsecured second mortgage or if they can't sell it for what you close to what you owe, that sort of thing.

Basically you need to call the bank and tell them that you can't pay it, it is vacant, and you are out of state. If the bank agrees to a sort sale, you work with a realtor to try to sell it for less than you owe based on whatever amount they are okay with. You make nothing, in some cases they may then convert the amount of the difference to a personal loan in your name that you are obligated to pay over time. Sometimes they may try to have you pay them some amount to get out of it, etc.

If it goes to foreclosure, basically the bank takes ownership and auctions it off to the highest bidder. If they get no buyers the bank holds the property for a time and tries again.

In either case your credit is probably in the toilet for a number of years into the future. The best you can do there is to submit an explanation to all the bad history, and try not to need to do anything on credit for a long time.

In any case the suggestions to talk to a lawyer are good ones. Most of the time you can get an initial consult for free.

Call this number asap they helped me and can help you at no cost.
1800 ###-###-####. They are local in strongsville and work with people that have moved out of state and have a home in Ohio. Hope this helps

Talk to a good bankruptcy attorney. You shouldn't lose your car, but I am not sure about the 401K. Most attorneys offer a free consult. I am sorry you are going through this. It stinks...