Credit Score in 20744>Question Details

Florida Home…, Home Owner in 20744

I am 325% upside down on my mortgage-paid $275, now worth $80. Need to relocate for work. Will the bank accept a SS? Six years into loan. Never late.

Asked by Florida Homeowner, 20744 Sat Feb 12, 2011

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Dear Florida Homeowner,
You absolutely can qualify for a short sale. Being relocated does qualify for a SS. You want to be sure that you use a REALTOR that is certified and experienced in handling short sales. The process takes skill and finesse and you don't want an inexperienced agent selling your home who is unfamiliar with the bank's procedures. Your hardship letter should focus on the fact that you're being relocated and are forced to sell, and as a result, you are forced to list your home at the current market value, which will ultimately force you to be in a SS.
Do not do a deed in lieu as someone mentioned below. These are a voluntary foreclosure and the difference in your mortgage and what the bank sells your home for can be collected as secure debt later, and the bank can even 1099 you for the difference. I had a client who chose to not continue our short sale process against my advice and he called me last week because he received a 1099 for $290,000, the difference in his mortgage balance and the sold price of his home after he did a deed in lieu. In a short sale scenario, an experienced agent should be able to ask for forgiveness on your behalf when you receive the offer lower than your balance.
I do have agents I work with all over the country. If you need an experienced agent in FL, please feel free to contact me directly and I am happy to refer you to one based on what area in FL you reside. Good luck!
Regards,
Ariana Loucas
Keller Williams
2 votes Thank Flag Link Sun Feb 13, 2011
You won't know until you take the next step and ask.

Charles Lancaster
Exit Right Realty
240 554 4093
charles@exitrightrealty.com
1 vote Thank Flag Link Sun Feb 13, 2011
You absolutely can qualify for a short sale...the terms of the approval will depend on the lender and the investor.
Do you have mortgage insurance? If so, that will be another part of the approval process.
Regardless if late before or not, lenders are accepting short sales. I just completed one for a client that had a 750 FCIO score and was never late on his debts...it was an issue, but it's all about making the glass look half empty vs half full when making the case to the lender.

If you need help or have other questions just email me at: thinz@apexgroupus.com or at tom@shortsaletosell.com

Tom Hinz
1 vote Thank Flag Link Sun Feb 13, 2011
Preliminary approvals don't mean squat unless they come from the investor and /or MI company
Most prelim apprvals are just from the servicer on behalf of the investor without the investor direct input - just a guideline. Getting approvals while current on the mortgage is NOT as common as it was back in the 1990s...of course many professionals would not know that because they only started doing short sales the last few years as they jumped on the preforeclosure bandwagon. I would absolutely not make any assurances that it can be approved with no problem. That would not be a fair representation...
0 votes Thank Flag Link Mon Feb 14, 2011
You're getting some inconsistent advice from the posts below. Here are the facts: (i) if you have an FHA loan, you will need to be 30 days late prior to settlement, per HUD's letter ruling to that effect (although you likely can get a preliminary approval letter issued preceding the delinquency). (ii) if you don't have an FHA loan, you need not be late - relocation is considered a core hardship. We've settled multiple short sales where the homeowner wasn't late because they were so concerned over the impact of the SS to their credit score.

I'm an attorney and broker with a presence all over the state of MD - feel free to call and chat some more if you have any further questions, or visit my blog (url below) for lots of additional helpful information. Everything is free to you the homeowner.
Web Reference: http://legalgoto.com
0 votes Thank Flag Link Mon Feb 14, 2011
A couple other options are to rent, or to do something creative with it.
0 votes Thank Flag Link Sun Feb 13, 2011
Dear Florida,

Short sale are intended for hardship situations. If your relocation was a necessity that could be considered a hardship. Most people cannot afford a home in two locations. Check with a short sale specialist in your local area.
0 votes Thank Flag Link Sun Feb 13, 2011
You definitely have a hardship that is acceptable for short sale approvla in the fact that your job is being relocated. The amount of shortage that the lender/investor will accept will be based on their BPO (and possibly the appraisal if the BPO value turns out to be too high.) The terms of approval will vary based on the lender/investor. Some will require that you are at least 30 days late on the mortgage to review for a short sale. Others will not. If there is more than one mortgage on the property, the process will be lengthier and somewhat more difficult, but still doable. And if you have assets you may be asked to make a contribution to defray the shortfall or sign a promissory note to repay a portion of it. I would encourage you to list the property with a Realtor that is trained and experienced in short sales. Best of luck to you.
0 votes Thank Flag Link Sun Feb 13, 2011
The most important factor in qualifying for a short sale is hardship which you must prove in order to qualify.

What constitutes hardship? Reasons why people apply for a short sale

Unemployment
Reduced income
Divorce
Separation
Medical bills
Too much debt
Death of spouse
Mortgage payment increases
Business failure
Job relocation --- here's one factor in your case
Illness
Damage to property
Military service
Incarceration
Decline in market value (needing to sell, but property is worth less) - and here's another.

Because you haven't missed any payments ---- and we really don't want to say this --- but some banks may not even peek at your file unless you're seriously delinquent. As long as you're able to maintain your payments, the negotiators will think that you have the financial wherewithal to keep it up.

However...because you're relocating, and if the property is worth less than what you paid for it, those are serious enough reasons that may qualify you as a hardship case for a short sale.

Good luck!
0 votes Thank Flag Link Sat Feb 12, 2011
The unfortunate truth is that the bank may not consider your SS unless you are behind on your payments. Contact the loss mitigation department of your lender and make the request. Speak to a local Short Sale specialist ,Realtor and/or Attorney, in your area. The banks are doing Triage. They are dealing with the customer's who are in the most perceived need it seems, in my experience. Those who are behind get first priority with many of the lenders I have dealt with. Have you considered a loan modification or a Deed in Lieu. Either way, All options discussed have serious credit and possible income tax ramifications. A discussion with your CPA is also in order.
0 votes Thank Flag Link Sat Feb 12, 2011
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