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taxfilez · 10-31-2007, 02:09 PM

Our home is now appraised at $35K less than our mortgage and we are having a hard time paying. Our payment will be increasing by $900 due to an ARM program and we can not afford it. We dont have any 30 days lates on mortgage yet. Will a lender consider a short sale in our case?<br />

deli08 · 10-31-2007, 02:09 PM

I wouldn't do it that way. If your intent is to sell the home, my suggestion would be to put it on the market with a Realtor for the fair market value based on recent comparable sales.

Once you get a contract for the property and realize that you're upside down (you will sell the house for less than is owed and would need to bring money to settlement to get out), then speak with your lender. You'll need to provide documentation that it is truly a short sale and they will have the final say. The smaller the shortage, the more likely they will be to approve it. Make sure that the net sheet includes a reasonable commission to the Realtors (if the commission is too high, then the bank will probably ask them to reduce it). A commission of 5 or 6 percent seems to work well. They may also allow closing costs to the buyers of up to 3 percent.

One other thing to consider ... any amount that is forgiven by the lender MAY BE taxable income to you when you file your tax return. There is talk that the law may be changed to remove that, but it's by no means a done deal.

deli08 · 10-31-2007, 02:09 PM

You have a few options, try to sell your property with a Realtor. Refinance with a FHA Secure imitative program (available until 12/31/2007) more conditions apply but an option.

A Short sale is really not a solution but more of a stop gap measure once financial credit standing is gone. Many home owners that purchase within the last 2 - 2.5 years have no equity or negative equity because of housing market corrections and inventory on the market for sale. If you can HOLD - many real estate predictions show markets rebounding in mid 2008. You technically have NOT lost any value until you actually sell (like stock) but being told your home is worth less than you paid for it tends to be alarming to ANY homeowner.

If you can restructure the ARM on your mortgage with your lender, try that. many lenders are re-negotiating terms of mortgages to prevent borrowers from going into default.

Good Luck

10-31-2007, 02:09 PM	#1
taxfilez Greenhorn Join Date: Jul 2006 Posts: 28 Rep Power: 6	can I request a shortsale from bank without being behind on payments?my home value is way less than my mortgag Our home is now appraised at $35K less than our mortgage and we are having a hard time paying. Our payment will be increasing by $900 due to an ARM program and we can not afford it. We dont have any 30 days lates on mortgage yet. Will a lender consider a short sale in our case?<br />

10-31-2007, 02:09 PM	#2
deli08 Piggy Bank Join Date: Jul 2006 Posts: 51 Rep Power: 6	can I request a shortsale from bank without being behind on payments?my home value is way less than my mortgag I wouldn't do it that way. If your intent is to sell the home, my suggestion would be to put it on the market with a Realtor for the fair market value based on recent comparable sales. Once you get a contract for the property and realize that you're upside down (you will sell the house for less than is owed and would need to bring money to settlement to get out), then speak with your lender. You'll need to provide documentation that it is truly a short sale and they will have the final say. The smaller the shortage, the more likely they will be to approve it. Make sure that the net sheet includes a reasonable commission to the Realtors (if the commission is too high, then the bank will probably ask them to reduce it). A commission of 5 or 6 percent seems to work well. They may also allow closing costs to the buyers of up to 3 percent. One other thing to consider ... any amount that is forgiven by the lender MAY BE taxable income to you when you file your tax return. There is talk that the law may be changed to remove that, but it's by no means a done deal.

10-31-2007, 02:09 PM	#3
deli08 Piggy Bank Join Date: Jul 2006 Posts: 51 Rep Power: 6	can I request a shortsale from bank without being behind on payments?my home value is way less than my mortgag You have a few options, try to sell your property with a Realtor. Refinance with a FHA Secure imitative program (available until 12/31/2007) more conditions apply but an option. A Short sale is really not a solution but more of a stop gap measure once financial credit standing is gone. Many home owners that purchase within the last 2 - 2.5 years have no equity or negative equity because of housing market corrections and inventory on the market for sale. If you can HOLD - many real estate predictions show markets rebounding in mid 2008. You technically have NOT lost any value until you actually sell (like stock) but being told your home is worth less than you paid for it tends to be alarming to ANY homeowner. If you can restructure the ARM on your mortgage with your lender, try that. many lenders are re-negotiating terms of mortgages to prevent borrowers from going into default. Good Luck

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