Short Sale Benefits
59Predatory lending
Democrats family: Fannie Mae & Freddie Mac
Doing a "short Sale" saves your credit
First of all, in order to do a short sale, you will need the permission of the bank. Usually you will have to have a foreclosure notice and then you will enter into some negotiations with the bank. Usually that means the owner of your first mortgage. If there is a 2nd mortgage, you may also be required to obtain their approval before proceeding.
Now, a short sale is just that. You will be selling your property at the market value, which is usually lower than what you had expected its value to be a few years ago. Sometimes you will be selling the property even lower than you purchased it for.
This has to do with the fact that several years ago, appraisers teemed together to inflate the value of houses beyond their real value. Additionally, there were mortgage companies and banks that lowered their standards for people with lower credit scores and finances (predatory lending).There were also some mortgage brokers who falsified information for their clients in order to "help" them qualify for a loan. actually, they were helping themselves more, because mortgage brokers actually subsist on thier commissions. so, the higher the purchase price of the property, the higher the commission. A lot of those mortgage brokers are now banned for life from practicing ever again. This was a practice very common in South Florida, New York and Cleveland in the early 2000's.
Some fianancial wizards dreamt up something called an ARM, Adjustable Rate Mortgage, which started out with an unbelievably low rate, only to be followed by a higher, unattainable rate.One of those "wizards" is Penny Pritzker, natonal chairwoman of the Obama campaign. Fannie Mae & Freddie Mac are at the top of the worst irresponsible lenders in the mortgage industry. And Barack Obama is the second biggest collector of payoffs from Fannie mae.
Basically, the people who fell for these schemes did not read the fine print. That is why there is a "sub-prime" mortgage crisis right now. Now, if you happen to be a person who has received a foreclosure notice, you will definitely want to obtain the approval of your mortgage company for a "short sale." Otherwise, your credit will be tarnished for years to come, if the bank reposses the house.
The fact of the matter is that mortgage companies and banks actually prefer a short sale, because otherwise they will have to hire a real esate broker, etc, etc in order to sell the property, and then they will also be taking a loss as well. They are not in the business of selling houses.
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Comments
My prayers are with you and your family. short sales are usually what you owe or less. usually not the market value. put it out there for 180 and let the buyer talk you down. Or put it out there for 180 and offer seller assist. As long as you are current on you home then you got a good chance on selling one and buy one at the same time. just transfer money. try and buy a house under market v. then you have equity.
it is a good idea to have a seller pay your closing cost. so you don't need alot of money. you can use your money towards the princple balance. Put it on the market and see what happens put on the next yourself.
it is harder selling a house then buying one. the regulations are crazy. look up different mort on the net and may reconstruct your loan.
personally i would just sell and buy at the same time. alot of people are having the same problem. so buying will be easy. just get out will its good
Hi blogging2 I disagree with aceproductions. This is not a good time to sell. Mortgage regulations are going to be stiffer when you go to buy a bigger house and you will not have any profit from all your work to put down for a down payment.
My best advice is to double up. I know that nowadays, every parent wants their new baby to have their own room. But this is being emotional on a financial issue.
Your best case would be to wait a few years for the price of your home to increase and then sell. You cannot expect to hold onto a property for a few short years and expect for the price to go up irregardless of the improvements that you have made. Remember market conditions have devalued property over the past few years.
Also you will not get permission to do a short sale unless you have been in foreclosure for some months and have received a foreclosure notice.
You might want to contact FHA to see if they can re-finance your mortgage to a lower rate. My daughter and her husband added a room within their garage for their new baby and did a terrific job. Actually made a new baby room, and office and a storage room. He raised the floor and put up the walls and added AC. Didn't need a permit.
Remember: there's a time for everything. This morning I bought some stocks, because the market was down. But it's not a good time to sell. My parents had 9 kids and believe me we weren't the Kennedys, so we doubled up a lot. If you want a bigger house for a new addition to the family, remember babies like company.
But this is just a temporary situation. The fact is that the housing market is going through a "dip' right now. I predicted that Fall 2009, market prices will go up. It can't be that bad blogging2, you're in St. Petersburg!
Thank you both for the tips, we are trying what we can and I will keep you posted on what happens. I think I may do a little rant on this in a hub, it will be too long for here :)
See fortunately, this country was based on a strong base. that is very important. the present housing crisis is temporary and it would be unwise for you to lose your investments. since your bought the house in 2006, unless you made some very important structural improvements, and even then, the market price will not reflect the "real" price and you will go away losers. I would hate to see that happen since you have sacrificed so much already.
After thinking about walking away, I did the right thing. I talked to a TOP NOTCH lawyer, not cheap free consultation attorney. Make a long story short, he had a realtor that specializes in short sales. My home just sold. The thing is, a short sale dings your credit a year. I owed 515K and it sold for 310K. They forgave the balance! Done! My attorney negotiated this; you will need one.
Foreclose and you are DONE. Stays with you and future loan questions on the applications ask just that-have you ever FORECLOSED. Shorts sale questions are never mentioned. I have just completed this whole ordeal. I am happy I talked to a GOOD Lawyer and did not just walk away. I can buy another home in 12 months.
congratulations I'm sure the lawyer cost a bundle
blogging2 says:
15 months ago
Thanks for the response... maybe you can tell me if it is possible for me or if we are just SOL (for lack of a better term). Bought the house in 06 for $168k. We have done $25k work on it since then. This was paid for by us apart from the loan and it is not on CC now. So we technically owe $165k. To sell and get into something else we have to have $10-15k from the sale or we can't make a down payment. So that means we have to sell at $175-180k (this is without a realator/or paying closing costs etc). I don't see that happening, but we want to get out of this one for a chance of having a larger family, we need more space.
Yet, we are the type we do the right thing and bust our rears to make sure that we don't fall behind on the payments. (If insurance jacks up again we are screwed, but lets not go there now.)
I am trying to figure out if we can do a short sale on what we owe the bank so we can sell the house at market value and have a shot or prayer of being able to get another home in the next 10 years. Any suggestions are GREALY apprechiated!