You'll live with a foreclosure for about 4 years with most conventional lenders and you don't even want to consider a stratigic. Most lenders if they know you did one won't even talk to you.
I Was reading all the Documentation on the National Board of Realtors and the CDPE? A Certified Distressed Property Expert is not recognized by them. All it means is that they have a Manual and spent a few hours in a classroom going over what should happen in a Short sale.
There are a large number of companies out there that do better jobs at Short sales than Most Realtors, Most realtors close 10 to 20% of short sales tried, where Private Investors close 78 to 92% of all deals.
Find your Investor first then tell the Realtor how the Deal goes not the other way around, Remember a Cash Investor at the Start in better than waiting for the maybe it will sale.
A short sale allows you to qualify for a home loan in as little as 24 months not the 7 to 10yrs. if the Foreclosure goes to the auction. If the Foreclosure process starts it does not put a 7 to 10 yr ding on your Credit, that only happens when the auction is over, remember the house is yours and you can sell it until you don't own it any longer.
Oh by the way, if you have a foreclosure on you credit you can buy a house the next day by using Owner Financing or Lease Option. Most Realtors only Deal with A type Buyers so I don't know if anyone is going to tell you these options.
Private Lenders only need a 520 credit for long term loans and Short term loans you don't need Credit.
Have you tried to Sell your house "Owner Financing With Large Down payment" (A Realtor is not needed for this type of Transaction, maybe just a Title Company)
Use the Large Down to make up the Back payments, and Create a New Loan Document that pays your existing Loan, plus you have the Option to get the House back if the new Buyer Defaults in the Future.
Good Luck, if you need real help let me know.
But that's an argument for another day and it doesn't help you with your problem. You've had some good advice from a lot of very competent professionals. However, you really have to make a choice. First could you keep the home and comfortably continue making the payments once the LM allowances start re adjusting and your payments start inching up once again?
Are you still gainfully employed and is your job relatively secure? How far underwater is your home? How does it compare to the rest of the neighborhood? Is your home still in good condition. Could you rent it out enough to cover the existing mortgage and go rent something yourself? These are but a few very pertinent questions you need to start asking yourself and I'm sure there's many more.
Lastly, if you really reflect on just how practical and prudent it will be to ride out the storm and wait for property values and the economy to start rebounding again it could take years or, depending on your age, a lifetime. If you have the staying power then go for it. If not you may want to consider taking the advice that so many others have offered up and look into a short sale.
But please don'd allow yourself to fall victim to a foreclosure. It will mess up your credit for years and make your life miserable. If you think you were frustrated with the LM procedures you ain't seen nothin yet. You may be better off just cutting your losses and moving on. But if you should decide to go with a short sale just make real sure you're dealing with a pro who knows how to get the job done.
We are a professional short sale service and would be happy to explain the process to you. Please call us directly to discuss your specific situation. Our services are FREE to homeowners. We look forward to hearing from you.
Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states
MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
First Team Real Estate
It's a tough spot to be in, I know.
The thing about a loan mod is that they're going to want to see steady income. That's where most business owners and self employed people have a hard time getting a modification approved. With a $4,000 per month income on an $800,000 loan balance they're probably having a difficult time justifying the payment to their investor.
If you want to get a modification approved it seems like you'll need more income. Have you considered renting out a room or two?
Short of renting a room your only option may be a short sale. Please remember that a short sale is not the best option for everyone. You should have someone look at your overall situation and help you decide if it truly is your BEST option. When I say someone... I mean a Realtor who successfully performs many short sales, a CPA, and possibly an attorney.
I'm sorry you're going through these difficulties. I hope you find your best through it.
First , let me say if you have been denied three times, you should be able to find out why they are denying you. Commonly, if your mortgage represents more that 31%, you will most likely be denied because banks only want to modify a note that is durable. My first suggestion is to find out the reason why you have been denied and then talk with a HUD approved housing counselor to see if there is any way to change that approval.
Second, currently there is a "forgiveness" mode for recourse on senior lien holders in the state of California that protect the borrower from deficiency judgements. Sometimes, modifying the loan now makes what was a non-recourse note now a recourse note which allows the creditor to pursue any deficiency. The only way to be sure of your specific risk for deficiency is to speak with an attorney and have them review your note.
Finally, before you decide on pursuing another loan modification or short sale, please make sure you consult with an attorney, a tax professional, and an agent who is experienced with short sales in your area. You want to make sure you understand the ramifications (if any) of any decision. Every situation is specific to the individual, future goals and their lender. Advising on the forum with minimum information could be misleading.
For HUD counseling call (888) 995-4673
Now, you should just plan to make a graceful transition to another living situation. I would suggest looking for a competent Realtor who knows how to conduct a successful short sale.
If you need more assistance, I'd be delighted to help you.
Bart Marchioni, Real Estate Consultant
Certified Pre-Foreclosure and Short Sale Specialist (CPFS, CSSS)â€¨â€¨
Intero Real Estate Services