Out of state owner needs guidance in upside down home with 2 lenders.
Hi Cheri, I had a question. I own a home in FL but had to move out of state for work 3 years ago. After no luck selling for 18 months (sad) we put the house out for a rental. Since our 2 mortgages are still more than what we are renting for, we really want to get rid of the house but don't have enough savings to pay the entire 2 mortgages off. Is the first step really to just find a realtor and find someone willing to buy it cheap THEN we talk to the lenders?
Your first step is to get it listed with a Real Estate Agent and make sure she knows someone who can do a Short Sale. Once you have it listed and someone puts an offer on the house - the short sale process begins. The lenders (Banks) are willing take less than what is owed on the house but someone (either a Short Sale company or Attorney) needs to speak with the lender on your behalf and negotiate with your lenders (the people you are paying your mtg to) If they do not like the purchase agreement or need more money to settle the debt the lender will let you know (you may have to ask the buyer to increase the purchase agreement amt). In the cases we are seeing in MI are as follows: If the seller has a first and second, the lenders are making the sellers take a note out for the 2nd mtg at % of what is owed and paying it with 0% interest rate over 10 -20 yrs. Most of the time they are forgiving the seller on the first for the difference owed. In any case your credit may take a ding -but if you keeping paying all your bills on the time your credit score will go right back to where it was in a couple of years. I hope this helps. If you have any other questions, please feel free to ask. I am in charge of an entire Short Sale Division.
Yes. Lenders will not look at a short sale payoff unless you have a purchase contract in place. Find a local Realtor who specializes in short sales. They can help you. Also, ask your tenants if they want to buy the home. Using FHA or VA financing, they can put a very small down payment.
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