Foreclosure in Park Forest>Question Details

Kay, Other/Just Looking in Illinois

Foreclosure help needed.

Asked by Kay, Illinois Fri Jun 10, 2011

Hi, I'm a single parent who has been struggling over the last four yrs with a house. I do not want to stay in the house after this year, but need info on how to handle this situation. Can I do that process called lieu of something? The mortgage is with Chase. What type of attorney do I need to talk to, real estate attorney, foreclosure attorney? There are a ton of houses in my area and no one is buying them. A realtor friend of mine suggested trying to do a short sale and make the foreclosure a last resort. I don't know anything about this can someone chime in please?
Thank you

Help the community by answering this question:


Kay -

Sorry about your troubles. You are right, I do a lot in Park Forest and anything over 70-80k is not selling. Couple things about a short sale. First, you have to have a hardship to substantiate a loss of income approved by the bank. Second, you want them to excuse the deficiency. You should get an attorney who specializes in short sales and foreclosures. If you have a deed in lieu of foreclosure, that is the best thing, but the bank has to go along with that. It will help you reestablish credit quicker and get on with your life. Short sales and foreclosures will take 200 pts or more on your credit score and could prevent you from getting a loan or even renting. Also, ask the bank to be on the government HAFA program for a short sale. It requires them to forgive the deficiency and provides both you and they a little cash back. Plus, it requires a 60 day turnover, which is beneficial to a potential buyer. Many buyers don't want to wait for short sales.
1 vote Thank Flag Link Fri Jun 10, 2011
A deed-in-lieu of foreclosure is what you were mentioning. The bank's like this because you basically agree to turn the house over to them and walk away in exchange for them not foreclosing on you. it is the cheapest and fastest way for them to get a non-paying borrower out of the house. This is a good option for you after you have tried a short sale first (if you don't get a buyer in a short sale you can usually get a deed-in-lieu). You should list the property with a realtor and contact Chase telling them of you intentions to sell. If you live in the property still, you may qualify for the HAFA short sale sponsored by the government Making Home Affordable initiative. This program will give you total forgiveness of the mortgage debt and 3,000 in relocation money just to name a few of the benefits. Also, once approved you will have 4 months to sell and it will probably take 2 months to get approved for the program potentially allowing you to stay in the home for 6 months or longer. Go to for more eligibility requirements. It is not necessary to talk to an attorney unless you have legal questions to ask regarding your options and debt liability. Hope this helps!
3 votes Thank Flag Link Mon Jun 13, 2011
Hi Kay,

I think you got the information that you need. Unfortunately, the posts have moved away from advice to something else.

Attorney Ranj Mohip is a Chicago real estate attorney. The information in this answer is general information and is not intended as legal advice. Further, answering this question or otherwise contributing as a member of does not create an attorney-client relationship. Remember--consult the best real estate attorney in Chicago or in your respective area.
2 votes Thank Flag Link Tue Jun 14, 2011
Yes you can do a deed in lieu of foreclosure, or you can do a short sale.

If you do a short sale, it is possible to be done with the entire process after you complete the short sale., and not owe any money afterwards. If you speak with a Realtor, they will attempt to push you towards a short sale because they can make a commission that way. The bank which you owe money may not want you to do a deed in lieu of foreclosure. Remember the banks business is money, not houses, they want money. The bank would have to accept the property back in a deed in lieu of foreclosure, the bank takes the home back which they would then have to sell, they really want the money.

Find a Certified Distressed Property Expert in your area to hire as a Realtor. These agents have taken special training and are familiar with the short sales and deed in lieu of foreclosures. Since I am a RE/MAX Broker, I am biased towards my company, I would say speak to a RE/MAX agent, they tend to be more experienced and more knowledgeable.
2 votes Thank Flag Link Sun Jun 12, 2011
Hi Kay,

You have a handful of options, but we can skip some of those since you don't want to stay in the house. You may qualify for a deed in lieu of foreclosure or a short sale. You may not. Feel free to contact my office. Trulia is a great forum for general information, but for this situation, you really should contact a real estate attorney.

Attorney Ranj Mohip is a Chicago real estate attorney. The information in this answer is general information and is not intended as legal advice. Further, answering this question or otherwise contributing as a member of does not create an attorney-client relationship. Remember--consult the best real estate attorney in Chicago or in your respective area.
2 votes Thank Flag Link Sat Jun 11, 2011
Kay, Sorry to hear of your situation. Your home is your largest personal investment and unfortunately, many families are facing the same dire consequenses of a national real estate crisis. You are to be commended for doing your due diligency in researching the best options for your present status.

Yes, if your realtor friend is knowledgeable about short sales, I would encourage you to first ask her to help you first explore a renegotiation of your present loan. The realtor should have the required paperwork for you to sign in order for her to speak to your lender.

Good Luck,

Laura Andersen
Georgia Elite Realty
(678) 462-1191
1 vote Thank Flag Link Mon Jul 4, 2011
Good Morning Kay,
The type of attorney you need is one familiar with foreclosure defense.
Along the way, you may seek to also list the property as a short sale with the assistance of a Realtor to both sell the property and eliminate the deficiency judgement.

Since we provide a number of foreclosures for banks that are foreclosing on property owners, as well as for property owners who are fighting with the bank, we interact with many attorneys. If you would like a referral, we would be happy to provide a couple for you.

No matter what you do, DO NOT SIT ON THIS. TAKE ACTION. Otherwise, you will get foreclosed on and that will be an unnecessary and avoidable outcome.


Michael Hobbs
PahRoo Appraisal & Consultancy
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1 vote Thank Flag Link Sat Jul 2, 2011
Hey Kay,

I'm sorry to hear you are in this situation. Hopefully you can take comfort knowing that you are not alone and because of this there are many free resources that can help you and give you guidance. Lindsey Taylor's response below is basically the same advice I would give you.

The only thing I would add is that you shouldn't have to come out of pocket in order to get rid of your home. My wife is a real estate attorney and I'm a Realtor and we both would agree that you should talk to a real estate agent first before speaking with an attorney. A good real estate agent will be able to help explain all your options and help you with a deed-in-lieu of foreclosure if at the end of the day that is what you decide to do. I've worked with a few agents in the Chicago area in the past and can refer you to a good agent if you want. Just contact me.

I have nothing against attorneys (obviously I married one), but if you are struggling to keep your home, it will probably be a big burden to pay one.
1 vote Thank Flag Link Tue Jun 14, 2011

To better understand your options you should seek assistance from a foreclosure attorney. When you know your options, it will be easier for you to make your decision.

Best of luck!
1 vote Thank Flag Link Mon Jun 13, 2011

So happy you found someone to help you. :)

On a side note to Walter, although I agree with most everything he said, there are two points to qualify. He said you CAN DO A SHORT SALE. While I have been trying to get you to look into it, I want to be clear that you may qualify. It is not an absolute. And when Walter said, "PUSH" people toward a short sale to make a commission, I'm sure he didn't mean it the way it sounded. My reason for talking to home owners about short sales are to help them avoid the worse ramifications of the other choices and I have been successful at it. If an agent is truly working a short sale to completion, very often they are only making pennies on the dollar. I've been asked why I continue to work so hard for so little and my answer is always the same. I need to help these people.

A happy and healthy week to all.
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1 vote Thank Flag Link Mon Jun 13, 2011
No, John,

I do not know Kay's numbers or her entire story, which is precisely why I suggested she get in touch with a real estate attorney and her bank. Everyone's situation is different and what is right for one may not be the right thing for another. I am not telling Kay what she should do. She asked the question and I am merely trying to inform her of the different options she may still have.

In the mean time, it is very obvious to me that you do not understand what a short sale is. If you did, you would not continue to tell her to sell it for what she can get. And then what? She still has to pay the bank. Your comments are still contradictory. And YOU said, "Maybe there should be a law requiring the disclosure of credit scores on all real estate transactions." I don't know of any home loan that is granted without first checking credit scores, so no clue why you would say that.

I think you have a lot of pent up feelings about the economy as most of us do. However, Kay is not a number or a statistic. She is a person who has come here for some help. Your paragraphs of number and statistics are not relevant here. This post is not the place for this kind of talk. If you want to let it out, write a blog.

I'm curious, John. Can you give me the definition of a short sale?
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1 vote Thank Flag Link Sun Jun 12, 2011
Linda is 100% correct. When faced with the choice between a short sale and a foreclosure, a short sale is better for everybody: the seller, the bank, and the neighborhood.

John, just because the average income some place might be 60K and the median payment might be $900/mo doesn't mean that fits everybody's situation in that place. Different people are paid differently and have different financial and personal obligations.
1 vote Thank Flag Link Sat Jun 11, 2011

Your comment, "In this market, it looks like sell it for whatever you can get and find an area that is not in such dire conditions if they exist for a new house. " Tells me that you have no clue what a short sale is. In one breath you are advocating one thing and then you completely contradict yourself in another.

I'm sure by now that Kay understands and will make a wise decision. And as to your question, "Why would any decent broker want to get involved with or encourage losers."? This is the precise reason I am encouraging her to look into a short sale versus foreclosure. If she ".....sells it for what she can get." as you mentioned, that is exactly the point. Instead of walking away and having a foreclosure and the ramifications of it, at least try a modification and if that isn't helpful, then try for a short sale.
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1 vote Thank Flag Link Sat Jun 11, 2011

In response to YOUR comment, "We need winners. Not losers! Short sales are losers fore everybody!"

This is precisely why Kay is better to try for a short sale. This is far better than a foreclosure, not only for her, but also for the neighborhood. When applying for a short sale and in almost every call afterward, the first thing the bank asks is, "Are they still living in the home?" This is because we all know that if a person let's their home go into foreclosure, they often times end up vandalized due to vacancy. I would think that would be far more detrimental to the neighbors than a short sale. So short sale, in my opinion, is still a far better idea. Don't you think?
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1 vote Thank Flag Link Sat Jun 11, 2011

Those are great statistics. I'm not sure I buy all the numbers, especially if they are government numbers, since the government statistics have been fudged so much in the last few years. But assuming they are true, yes, the numbers themselves don't look that bad. Population growth isn't a reason for increased housing demand when you have 2-3 families consolidating into one home.

Our systemic money problem in this country is because we import more than we export. The theory of balance of trade has been dismissed by modern economists today, but they were and are deluding themselves. Trade deficit matters. Up to about a century ago, if country X had a trade imbalance, that country would export gold. That would create a shortage of gold in country X and increase the value of gold there, and so the producers of goods in country X would be induced to produce more to get that rare commodity. The money supply then stays in country X, and they likely even get more gold from their exports, the result of a trade surplus. But the U.S. didn't want to do that. We had some very clever people who decided that by taking us off the gold standard, we could keep our gold. We also had a tremendous amount of good will, and our word and faith in the U.S. currency was as good as gold. As a result, our trade deficit is now made up by dollars. This is great, because when we have a shortage of dollars, we can just create more dollars! So we don't have to actually make anything. We can be a nation of bankers, lawyers, appraisers, stock brokers, real estate agents, and paper pushers. Unfortunately, it will only last so long before the rest of the world is flooded with worthless dollars. We don't make much of anything in this country anymore. We import everything, while we export plastic, paper, and metal scrap (I'm also in shipping in addition to Real Estate). Our few exporters that still make things (such as CAT, John Deere) but they are quickly opening plants overseas. Most of what is made in the USA is actually produced overseas and just assembled here (and there are those products that just get stamped too). We don't even make seat belts for our cars here!

Because we haven't manufactured en masse in so long, our manufacturing sector is atrophied. It would take 30 years or more to bring everything back. We have too many people going to college and not enough people actually producing material value because there is no demand for that type of worker. Our manufacturing industry has been regulated and "unioned" nearly out of existence, and it won't come back until the barriers to business are removed and unions stop receiving the protection of the politicians.
1 vote Thank Flag Link Sat Jun 11, 2011

Nice job on the figures and stats, however, I do not think this is the thread for that information. This is a lot of angst to put on a single parent looking for a simple answer to her problem.
1 vote Thank Flag Link Sat Jun 11, 2011
In response to some John's commentary:

It would be nice for everybody to get together and decide they will refuse to sell for any less. However, I think that would be impractical, not to mention conspiracy and a form of price-fixing. Short sales aren't the only reason for price declines. In fact, REO's are a much bigger reason. There are more REO's on the market, and at much lower prices than short sales. The REO's are what's selling too. And there's a huge REO shadow inventory. I would argue that short sales are a symptom rather than a contributing cause or even a significant factor of why prices are still declining.

The phenomenon the we are experiencing with the housing market is partly the result of capitalism correcting for a bubble brought on by government interference over the last 30 years, but especially in the last 15 years. It was a bad idea to create a government policy that everyone should be own a home. Loose credit in the housing market created artificially high prices, over-speculation, and a total loss of reality.

The other reason we are still seeing the housing market collapse is because of simple supply and demand. There are too many homes for sale, so there is competition. To beat your competition, you either offer a superior product or reduce your price. The main components of real estate are price, location, and condition. You can't change the location. It's fixed no matter what. Condition only goes so far, and it costs money to improve one's home, which is in short supply these days. Price is the most obvious and quickest fix.

I think supply in general is accruing less quickly than it had in the past. Sellers who don't have to move, have jobs, and may be upside down in their mortgages are just staying put. The majority of people selling HAVE to sell.

But why do we have such little demand? Biggest reason: the lackluster economy in general. All we heard on the news the last 9-12 months is how much the economy was improving. All lies. Jobs have suffered the entire period, and they are suffering more now. Without jobs, you won't have more buyers. In relation to real estate, we need people working and getting an income in order to 1) keep the homes they have so they don't HAVE to sell, and 2) allow more people to be able to afford to buy a home, which will allow for an increased demand. So when the bleeding of jobs stops, the housing market should start to stabilize, assuming there's anything left of housing values by then. The future housing market boom will also lag the jobs recovery by about 2 years. It will take some people that long to save up for a down payment and/or have their credit recover.

This housing market is one of the fruits of "Hope and Change," and we are all settling in to a nice "Lost Decade" at best, or a "Greater Depression" at worst. Enjoy.
1 vote Thank Flag Link Fri Jun 10, 2011
You are very welcome, Kay. I checked out the website that Molly sent you and it is a good one as well. If you do your research, you will find much information that will help you through. It is also important to find an agent that has patience and is willing to work hard for you along with the knowledge and experience. We all wish you good fortune and we look forward to hearing back from you int he future!

Let us know how you're doing.
1 vote Thank Flag Link Fri Jun 10, 2011
I am very sorry you are going through hard times! So many people are and it is a shame. I would weigh out all options! There are pros and cons to doing a deed in lieu or short sale. You should visit.. and find an agent in your area that is certified to discuss short sales and all options available to you! A short sale isn't for everyone BUT you need to sit down with a specialist so that you know ALL options available to you. Don't just take 1 persons word, do research on your own as well. I have attached a link that shows the pros and cons to deed in lieu vs. short sale. Good Luck!
1 vote Thank Flag Link Fri Jun 10, 2011
John, I did not say it was the definition of a short sale.

However, I am very familiar with the short sale process and I am hoping that Kay will take my advice and seek counsel on this. There is some misinformation here and I do not want her to move forward blindly.
1 vote Thank Flag Link Fri Jun 10, 2011
I'm sorry, but I do not understand why John would say everybody loses. Kay, please do yourself a favor and speak to a real estate attorney about your issue. There are many things that qualify a person for a short sale and you may very well fall into one of those categories. And if it sells prior to 2012 there is a good chance you may not owe anything if you get it sold. If you hire an agent to perform a short sale, go to and find an agent in your area that has experience. There is certain criteria that must be followed to have a successful short sale. It is important to know the type of loan the seller has and the type of loan the buyer is using in order to proceed. In MOST cases, the banks will accept somewhere in the 80% range of the CURRENT MARKET VALUE.

You need legal advice before making your decision and you cannot get that here. We are not allowed to give you legal advice.
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1 vote Thank Flag Link Fri Jun 10, 2011
A short sale will limit the amount of damage to your credit, so it is a good option. However, the transactions take a long time and may be tricky. There are no guarantees because they require your lender to release their lien on the property without being fully paid back. This involves a lot of paperwork and dealing with a bureaucracy. Additionally, buyers know these transactions are difficult, so some buyers don't like making offers on short sales. It's your attorney's job to make sure you get forgiven of all the debt as well, so no collections companies call you 2 years from now asking you to pay your mortgage. Use an attorney who specializes in short sales.

The deed in lieu of foreclosure is also referred to as a friendly foreclosure. In the end, the bank ends up with the house. But instead of making the bank go through the courts and spending money, you're essentially agreeing to release your rights to your lender. Again, it's your attorney's job to get you the best terms here as well. You want to be forgiven for all debt in relation to the property. You may also be able to get the bank to report this transaction as "paid in full" to the credit bureaus so it does not damage your credit. This transaction will require a foreclosure attorney.
1 vote Thank Flag Link Fri Jun 10, 2011
Your "realtor friend" is right on the money. You should definitely consider a short sale.
1 vote Thank Flag Link Fri Jun 10, 2011
Kay, I would make foreclosure a last resort because it has a lot more negative affect on your credit score. The short sale process is being more streamlined and is much easier to work now that the mass volume is over and the banks now have guidelines on how they must handle the transactions. I can put you in touch with a local CRS agent that can assist you in proceeding correctly. Each area handles their processes differently, so it's important you have the right agent handle you situation and walk you through it. It's a process, so you have to get your mind set for the long haul, but if you do it, it will be much better in the long run. God bless you and your family.
0 votes Thank Flag Link Tue Jul 5, 2011
Hi Kay,

There's plenty of great answers in here but let me express my opinion as I've been working on short-sales & Loan Mods for quite some time now (since 2008). Every transaction is different and the results will vary, here's a few things to consider;

You want to contact your bank and inform them of your current situation, let them know you are in the process of selling the property( Short-sale). The bank needs to see the property listed for sale for at least 90 days before considering a DEED-IN LIEU- OF FORECLOSURE.

Hire professionals that specialize in Short-sales, I've seen transactions fall apart because of the lack of experience of the agent or attorney.

I agree with Michael Hobbs take action now time is of the essence,Foreclosure or Bankruptcy should be considered as your last option.

1. Realtor- The Realtor you hire MUST have experience with short-sales. Must, must, must!
2. Real estate attorney- Must have experience with Short-sales and should concentrate only in real estate.

Good Luck!

Jose Hernandez
Keller Williams, Gold Coast
0 votes Thank Flag Link Tue Jul 5, 2011
Kay, Have you considered renting out a room in your home to help lessen the full burden of the mortgage? Typically in a room for rent situation such as on you can get close to $500 per month per room if you include utilities. That income might help you bide some time until you're earning more or the real estate market is better in your area.
0 votes Thank Flag Link Tue Jul 5, 2011
Short Sale would be a great idea, but the bank must deem you financially needy to do that, Ask about Home in Lieu of Mortgage as a possible way out, it would save you the foreclosure stigma on you credit records. A Local Real Estate Lawyer is you best be in this case and not a Realtor since the financial legality of what ever you do will be complicated. Do everything you can to save yourself from Foreclosure and Short Sale, but if yo have to go that way, the Short Sale is far less damaging to you in as far as it is forgiven sooner than a Foreclosure!
0 votes Thank Flag Link Mon Jul 4, 2011
Hello Kay,

The current system for home owners who are "under water" is difficult. Mortgage companies won't accept a short sale offer unless the borrower is behind in their payments, and if a borrower stops making their mortgage payments then the lender may foreclose before an acceptable short sale offer is closed.

Also, you obviously need a place to live, and if you give up the house then you'll be in a rental situation which might work in the short term, but for long term security you're better off owning your own home.

Therefore, I would suggest that you approach the mortgage company to see about renegotiating your loan. Perhaps you can appeal the house value through your county, and once reduced to the current valuation, take this information to your mortgage company.
0 votes Thank Flag Link Sun Jul 3, 2011
Your Realtor friend is right -- Short Sale can be a good solution to a bad problem. However, I would not suggest listing your home with your friend, unless he/she has a track record of successfully closing short sales. This is where you should do your homework and google search "Short Sale Realtors" in your area and find an agent with a proven track record for completing short sales. Let's be honest - you wouldn't want a surgeon to operate on you that did not have experience, so don't list your property with a Realtor that is unexperiened in closing short sales (even if they are your best freind) -- because this is a business decision not a social favor you are asking. Unfortunately a large percentage of short sales do not close, because they are not handled by someone experienced in the process. About Deeding your property to the lender (known as a "Deed In Lieu") -- don't Do It ... unless the lender waives the Deficiency. Doing Nothing and letting the lender Foreclosure is the worst thing you can do. In short, Short Sale and select the best person in your area to do this. Visit my website for more insight.
0 votes Thank Flag Link Sun Jul 3, 2011
Hello, I am a Cerified Short Sale & Foreclosure Resource Realter, Certified by Natonal Association Of Realtors.
Inasmuch as you mentioned "there are a tons of properties in your area for sale and no one is buying". Short Sale might not be the best option for you, you risk your property sitting on the market like the others until the bank ends up foreclosing anyway. My best advise to you would be to rent or lease your home out for as much as the market will bare (and only if it makes sense. meaning enough to pay the mortgage payment) until the economy gets better. USUALLY In an area that people are not buying more people are willing to test the waters and rent for a while. In addition many good people like yourself who lost their homes due to the economy cannot buy right now but can afford to rent. Deed In lieu Of Foreclosure is not the best option for everybody, but is one you might consider verses spending out more money on attorney fees etc. for a property you no longer want to struggle with and that which is over encumbered. In some cases you can negotiate with the bank to give you relocation money with the Deed in Lieu. Hope this helps!

Teresa Peters
Certified Short Sale & Foreclosure Resource Realtor
0 votes Thank Flag Link Sun Jul 3, 2011
If you want to short sale a Realtor experienced in short sales has the best information. If you are facing foreclosure advice should come from a attorney licensed in your state who specializes in foreclosure law. Foreclosure time-frames and procedures vary from state to state. Experienced Realtors do have foreclosure knowledge, but our license is for approved real estate contracts, marketing and sales. Agents should avoid extensive advice beyond the scope of their license.
0 votes Thank Flag Link Wed Jun 15, 2011
Lindsey - I spoke with someone today regarding everything you mentioned below, so this choice is being considered. I'm still acquiring information at the same time.

Good info thanks

0 votes Thank Flag Link Mon Jun 13, 2011
Why don't you believe your friend who suggested a short sale? Sounds like good advice to me?

DAVID COOPER Foreclosure and Bank REO's Specialist-Las Vegas.35 years experience For freee list
Call +1-7024997037 or check website
0 votes Thank Flag Link Mon Jun 13, 2011
Geez. Fort Myers Florida. You must have all of those Rich Dad Poor Dad mentors flying in and looking for the kill.

You mentioned one thing in your site that was interesting. You postponed the short or foreclosure. Well that is not such a bad idea. In other words when the market is bad and you bought a little high. Hold. Rent. Wait.

That is the struggle. Those that have the strength to whether the storm usually work through it. Unless you bought for so high that it will take you 25 years to recover. There are some of those. Then take your loses and move on. Or take your loses early when you are down about 7 to 10% and never let it get so bad to be 100% or more. However, you take the loss. Not the bank. You promised to pay them back.

If you are being put to with some obnoxious ARM that could cause a lot of problems. Modify and get that debt under control to what it was when you originally bought and were approved for based on your ability to repay.
Unless hardship has entered the picture and you need to bail. Yet the whole market of Park Forest! Can not be. This is not Detroit! This is Park Forest.

Come on Park Forest. I know you can do it! I was born in that area. It is a great starter town! Lots of large lots and nice houses!

Come on Park Forest you can do it! Obama is cheering for you. You can do it without his help!
0 votes Thank Flag Link Mon Jun 13, 2011
wow 46 answers if that isn't enough help i'd be shocked. The solution sounds simple: Do a Short Sale!! Don't hire a CPDE (Certified Distressed Property Expert) or a SFR Short Sale Foreclosure Resource Agent, or any other designated "experts" in the field unless they have closed 50+ short sales! Short sales have been a part of your market since 2008, that is over 3 years, if a realtor isn't closing 15+SS a year i would shy away. Short Sales are easy, a simple process, it is just that a process. And "experts" without proven closing know the process but to get them closed and massage the deal through to closing, they might not know how to do.

Here is blog about short sales vs foreclosure…
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0 votes Thank Flag Link Mon Jun 13, 2011
There are 760 expired listings in Park Forest for the first 6 months of 2011 with average at $115K. There are 940 listings with average at $107K, and 58 sales with an average closed sale price of $42,000.

Of the 58 closed sales for 2011 fifty of them are short/foreclosed. The ones that sold at market are at the high end. $168, $126K.

So you see the effect of the short sales on the market. Because if you take those out and average the "market value" sales it will be around $109K. Twice as much as the foreclosed sales.

So if you want to talk about "struggle" it seems to me their are a lot of good realtors in Park Forest struggling to keep the market from tanking. And 58 sales for Brokers in Park Forest is terrible.

That has got to stop. Park Forest is not that bad. Unless it has tanked as bad as Detroit. And if you try to tell that to Obama whom was just at the Ford plant, you may be out of USA residency! Fired as a USA resident!

Come on Park Forest. I know this market can change! No more losers.
0 votes Thank Flag Link Mon Jun 13, 2011
You might also want to try a company that does flat fee listings (which I offer by the way); that way you can cut your commission in half and afford to sell a little lower.
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0 votes Thank Flag Link Mon Jun 13, 2011

Given the numbers you put up, you may not need to do a short sale. You're not in that deep based on the rest of the area. And be wary of Zillow's numbers. Zillow assumes that you paid exactly fair market value for the property, that the property is in exactly the same shape as it was when you started (no better, no worse, no improvements), and then calculates a value based on the price trends in your area. As a result, Zillow had really inflated values during the boom times and often has below-value prices now. It's just a computer program; no appraiser or Realtor has reviewed their estimate, and truthfully, they should even give those valuations because they are almost never right. Yet people put a lot of stock in these values. I've sold houses that were REO's that have since been totally renovated and basements finished but Zillow doesn't know that, so they assume the value is even lower than what the current owner paid for it.

See if you can sell it without selling short first, then try a short sale if you don't get any offers for 2-3 months.
0 votes Thank Flag Link Mon Jun 13, 2011
The heart of real estate is Highest and Best Use. This would need to be validated yet it appears this market is so low that it is a rehabbers delight. The highest sale in Park Forest the last 12 months is about $168K, followed by $126K, $120K and $99K. There is enough income to support loans at $100K so it appears and if bankers require some money down even more affordable. A 203K loan is possible for an owner from HUD for rehab funds. So Kay bought at $122K with a loan balance of $116K. As long as Kay's house is in immaculate condition that house will attract buyers. However, the competition is with rehabbed houses. Kay can still compete with a very well kept house. Most likely the answer is not to tear down and build new. Although a strong case could be made to tear down and leave as vacant until the market adjusts and is shows signs of better balance and then build new because it appears there is an over supply. Holding costs would be accrued until new house is built and sold. Or you could put it to the county and not pay taxes and let it go for a tax sale if you could not find a buyer.

So the question is how well has Kay kept up her house and how much has Kay improved her house with updates? Kay says she has been struggling over the past four years with this house. What does that mean?
Short sales usually have hardship as conditions that a borrower must prove. If borrower is paying mortgage, taxes, insurance shorting the bank will be frowned upon. Losers not in the banks cards. Kay's numbers she disclosed on loan balance is not terrible especially in comparison to the areas ability for homeowner income. Lost job could be a nagging issue, yet there are signs of improvement in Park Forest.

If Kay can prove hardship, and her house is in below average condition and she is not paying her mortgage because of maybe unemployment or a terrible medical reason then maybe the bank may agree to let this borrower go and be a little merciful. Yet all of the others. Hmmm. Normally there will be a few of these stories. However, not the whole market. I have a difficult time with accepting the whole market in Park Forest is so desperate. That sounds like Detroit with massive job losses and companies leaving or Cleveland. There has been some disruption however, not to the same degree or change in industrial structure as Detroit. Solving problems with short sales drives this economy further in a whole. So if Kay truly needs to be bailed out. Fine. Other wise promoting short sales is on the fringe of unscrupulous. A good broker would rather walk because it is just bad business. So what how much training a broker has on how to short a bank. That just does not sound like very profitable training. Maybe a lawyer needs to understand bankruptcy and so forth yet to train brokers on how to short banks? If a broker has a court order that may be different. This idea that market sales is the same as short sales is very very troubling for Kay, for Linda, and all others!

I hope you work your way out of your "struggling" condition. And I hope you make some money while you do it even though it may not be easy. Since that sweat equity and hard work are the stories we all need. Because when the going gets tough the tough get going as some of my most treasured past teachers have quoted.
0 votes Thank Flag Link Mon Jun 13, 2011
Thanks Walter, oh most definitely the ladies who have left mgs put me in contact with the site that deals with distressed properties and guess what? The guy is with Remax here in Illinois and I will be speaking with him this week.

0 votes Thank Flag Link Mon Jun 13, 2011
Thank you Kay and all the best. Please let us know how it turns out for you.
0 votes Thank Flag Link Sun Jun 12, 2011
I will be talking to a few lawyers within the next few weeks to get the legal aspect of my situation. Linda, Suzanne, Molly,Anthony and Eli I will keep you posted and I am thankful for your assistance.
John - Thank you

By the way, current stats
Purchase Price - $122,900
Current Balance - $116,800
Value via Zillow - $89,000

All info you all provided is appreciated.

0 votes Thank Flag Link Sun Jun 12, 2011
John, like I mentioned before thank you for your opinion but please do not come on the posts insulting another person personally or professionally. I do not want to report the posts to the community. Everyone has an opinion but respect is always first and foremost.

Thank you
0 votes Thank Flag Link Sun Jun 12, 2011
Okay here is a suggestion. Try auctioning the house with a minimum bid of the loan balance plus closing costs.

Or find the outfit that leases your house for up to six years until you sell at your price while you build a new house.
0 votes Thank Flag Link Sun Jun 12, 2011
And YOU said, "Maybe there should be a law requiring the disclosure of credit scores on all real estate transactions." I don't know of any home loan that is granted without first checking credit scores, so no clue why you would say that.

DISCLOSURE. ON MLS LISTINGS. GIVEN to appraisers to use as a characteristic to compare! How about explicit loan terms such as ARMS and rates! How about disclosing how much is rolled into the loan from credit card personal property debt!

Maybe real estate would not have become so inflated and maybe appraisers would be the instigators of killing more refinance loans and being bad. And then maybe these economic times would not be so long for a correction!
0 votes Thank Flag Link Sun Jun 12, 2011
In earlier posts the short version of a short sale: A short sale is an offer or sale below the current loan balance.

This is a longer definition from Wikipedia. I am sure a lawyer has his legal definition. So Linda, just curious how do you define a "Short Sale."

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.

In a short sale, the bank or mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Neither side is "doing the other a favor;" a short sale is simply the most economical solution to a problem. Banks will incur a smaller financial loss than would result from foreclosure or continued non-payment. Borrowers are able to mitigate damage to their credit history, and partially control the debt. A short sale is typically faster and less expensive than a foreclosure. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.

Lenders often have loss mitigation departments that evaluate potential short sale transactions. The majority have pre-determined criteria for such transactions, but they may be open to offers, and their willingness varies. A bank will typically determine the amount of equity (or lack thereof), by determining the probable selling price from an appraisal, Broker Price Opinion (abbreviated BPO), or Broker Opinion of Value (abbreviated BOV).

Lenders may accept short sale offers or requests for short sales even if a Notice of Default has not been issued or recorded with the locality where the property is located. Given the unprecedented and overwhelming number of losses that mortgage lenders have suffered from mortgage failures that in part triggered the financial crisis of 2007–2011, they are now more willing to accept short sales than ever before. For "under-water" borrowers who owe more on their mortgage than their property is worth and are having trouble selling, this presents an opportunity for them to avoid foreclosure as a result.
Multiple levels of approvals and conditions are very common with short sales. Junior lien-holders - such as second mortgages, HELOClenders, and HOA (special assessment liens) - may need to approve the short sale. Frequent objectors to short sales include tax lien holders (income, estate or corporate franchise tax - as opposed to real property taxes, which have priority even when unrecorded) and mechanic's lien holders. It is possible for junior lien holders to prevent the short sale. If the lender required mortgage insurance on the loan, the insurer will likely also be party to negotiations as they may be asked to pay out a claim to offset the lender's loss in the short sale. The wide array of parties, parameters and processes involved in a short sale makes it a relatively complex and highly specialized type of real estate transaction. Not surprisingly, short sale deals have a high failure rate and often do not close in time to prevent foreclosure when they are not handled by a knowledgeable and experienced professional.[citation needed] Short sale negotiators, Realtors who are short sale certified (aNational Association of Realtors designation), loss mitigation specialists, and real estate lawyers who specialize in short sales are often brought in to handle these deals. Quite often, the average consumer is not aware that the lien holder pays the Realtor commissions, often exacerbating the difficulties.
0 votes Thank Flag Link Sun Jun 12, 2011
Linda I agree.. - next.. :)
0 votes Thank Flag Link Sun Jun 12, 2011
So if we consider per capita at $26,181 for Park Forest rather than a household at $60,000 that may consist of two wage earners although may not one could earn $60K. That could be a problem. That most certainly would change the numbers for loan approval considerably.

I know nothing of Kay and am not implying the following. Since Divorce rates in this country have skyrocketed. The numbers I see are 50% of first time marriages end in divorce. And 2 time marriages 75% of divorce.

So that average 2.5 persons per household is tricky. Risk for lenders is high. Except that in the past most homeowners were selling their house after 5 years. That can mitigate the picture for a lender.

Yet that high divorce rate has got to create havoc. Some marriages divorce maybe the best thing. However, 50%? We are that bad or poor in choosing mates? Or no respect for wedding vows till death do us part? For better or for worse? So if the divorce rate is so high, what would make you think borrowers will respect a loan payment? Because that borrower did promise to pay back that loan. Regardless of the condition of the market. I have never seen a loan with an upside clause to let the borrower out.

So I suppose the trend now is most commitments are for shorter term. Loans, marriages, jobs.

Good riddance to some underwriter just 2 weeks on the job or even an old pro with 30 years experience attempting to figure out loan risk. Since the insurance industry seems to think the number of potential claims is related to your guess score. Maybe there should be a law requiring the disclosure of credit scores on all real estate transactions. So now appraisers can use that as a characteristic of value. Crazy as that may seem, why do insurance company think that way? Your credit score is an indicator of how many car accidents you will be in or your risk of? The actuation have proved that with the numbers. Good business or not? I am not advocating any position. What are the answers to create more winners. We do not need more losers. Way way to many. We can absorb some. However, not as this has been and for the length of time.

We need more winners. Not more shorts or foreclosures. Or divorces. Or bankruptcies.
0 votes Thank Flag Link Sun Jun 12, 2011
Kay's numbers are unknown. The condition of her house is unknown. All types of information is unknown. I am amused that Linda seems to know Kay's numbers in Park Forest when Linda is from Wisconsin. Unless Kay is a friend or colleague or neighbor or something. Or unless Linda is an electronic mortgage broker and has Kay's financials. Did you write a CMA for Kay, Linda? Do you know the whole story. I don't.

What I do know is this declining market stuff has got to stop! And I am sure most judges would prefer borrowers and bankers work it out with the least amount of loss and the best zero loss for all involved! Better yet sell the house and make some money so the poor attorney can be paid.
0 votes Thank Flag Link Sat Jun 11, 2011
Thumbs Up Linda.

Thanks Ranj.
0 votes Thank Flag Link Sat Jun 11, 2011
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