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bude57's avatar

Foreclosure: Short Sale or just wait?

Asked by bude57 (16points) September 25th, 2010

I’ve lived in my home for 23 years. I haven’t made a payment on my mortgage since Dec ‘09. I have no regular job, I have noone living with me. Some people (including a bancruptcy lawyer) said to just live in the house until sheriff tells me to leave. And to not declare a bancruptcy until then. Then other’s tell me to do a “short sale” which could take awhile in today’s economy. I know that eventually I will have to leave my home, but what to do? Having trust issues with the lender, mediators, and lawyers. Help!

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8 Answers

marinelife's avatar

If you can find a reputable expert in short sales, then do one. Bankruptcy ties your hands for seven years.

It is also good not to have a foreclosure on your record.

You probably have a lot of equity in your home after 23 years. It would be best not to lose all of it.

wolfram's avatar

A bankruptcy, foreclosure or deed in lieu of foreclosure will remain on your record for seven years. Bankers will not be eager to lend money to someone who defaults on their mortgage – something to consider.

YARNLADY's avatar

You can’t just do a short sale. It takes the permission of the lender, and with your record, it’s very unlikely your lender would agree. If they do agree, that would be your best alternative.

CyanoticWasp's avatar

Man, 23 years in the home? I’m assuming that you had a 30-year mortgage. So you’re that close to owning the house free and clear.

I’d consider taking in a boarder to make the mortgage payment possible, and then catching up with the current lender. After that (I know that ten months’ worth of payments is a lot to make up, but lenders do not want to foreclose if you’re making the effort to keep up, and if you start a payment stream again I doubt that they would foreclose) then see if you can refinance the balance of the payments over fifteen years. That would still give you a possibility of outright ownership, but in more time than the current loan would have taken, and it should cut the payments roughly in half.

It doesn’t make sense to throw away 23 years worth of equity and likely appreciation (since the mid 80s it must have appreciated nicely, even in today’s market, if it’s been maintained at all well) and gamble on what you might get out of a foreclosure sale. The bank won’t be at all interested in your equity, and will happily sell it for only what they have in it now, leaving you in the cold.

bude57's avatar

I appreciate all responses. It’s just so frustrating trying to figure which way to go with this. I’m basically unemployed with just a small part-time job 2 days a week. I’ve tried boarders, and all they seem to do is steal things and not pay the agreed rent. And to top it off, I’ve had no monies to do any work on the house. I will check up with my lender on the “short sale”, they are the ones who brought it up. Being a victim of credit-card fraud, my credit is completely damaged, thus I’m not too concerned with bancruptcy (Until I need to buy a new vehicle). I’m just really in a horrible financial bind, that I fear will be unsurmountable to repair. Luckily, a friend says that once I lose my home that I can live with him. But, I’d rather not infringe on someone. Thank you all again for your input!

Judi's avatar

If your credit is already messed up, then a short sale won’t do you much good. The one thing it MIGHT do, is delay a foreclosure, but even that is questionable since a lot of banks are delaying foreclosures right now because they are getting in trouble for not doing things correctly.
If you’re with Bank of America, they don’t have a clue what they’re doing.
If you choose a short sale, ask your realtor how many short sales they have closed. In this market, I would go with someone who has done at least 10 if not 20. Also ask for references from other sellers of short sales. There are a lot of details to a short sale, and Realtors that just like to pile up easy listings are not always good at these details. They could really mess up your deal. You want to make sure you are working with someone who understands the short sale process better than the $10.00 per hour guys that bank of America puts on the phone to answer your calls.
Good luck, and I am so sorry you are suffering so much under these harsh economic times. I hope the corner turns in your fortune soon.

flalafaya's avatar

Not sure if this has answer you are looking for but you may want to do some research on how to short sale your home and still live in it during the process and afterwards as a renter, you may even have the opportunity if you wish, considering you spent more than 20 years in the home, you may want to buy it back at a later date. Anyway, it maybe worth it for you to checkout

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