Foreclosure in 20744>Question Details

Ellie, Home Seller in 33948

can you go for a short sale with still having money in your savings account- neither my husband or I are?

Asked by Ellie, 33948 Sun Jul 12, 2009

working and have been living off our savings and credit cards- we have large credit card debit as well, and have another mortgage we are trying to pay. or should I close my savings account?

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If you have plans to conduct a short sale part of the process is a financial disclosure. They also have a "look back" process, meaning if you have a large chunk of money in an account, and the account shows that you closed it, they will ask "where did you put the money?". I have heard for the most part sad stories regarding how much money a lender will allow a short sale seller to keep.

When you sell short that means that the lenders are going to take a big hit. So they are looking for any assets that you have to help offset their loss. That could include vehicles, jewelry, valuables with cash value.

Most people who are in a short sale need to prove hardship. That means you are unable to pay your bills. I agree with the other posts, if you are at the breaking point, then a short sale would be the best way to go.
0 votes Thank Flag Link Mon Jul 13, 2009
Keith Sorem, Real Estate Pro in Glendale, CA
The answer depends in how much money are you talking about $50K ? 100k? more?
The worse thing you can do is WAIT and see all your savings go to zero.

Your steps should be:
#1 Call the bank and try to modify your loan to fit you life style or . .
#2 Call a person that specializes in short sales and protect you in the process
#2 Sell your home and convince the bank to accept less money & get rid of the burden
I invite you to read my eBook "When is Short Sale an Option for YOU" in the link below.
0 votes Thank Flag Link Mon Jul 13, 2009
Anyone can qualify for a short sale regardless of savings, but having after-tax savings can put you at a disadvantage if you don't prove to the lender that the money is needed for critical living or medical expenses.

The main criteria is the hardship...and whether you are behind in payments or not. Many lenders will let you proceed with a short sale even if you are current on your nmortage, but there are some (like Fannie Mae) that will not process a short sale unless you are at least 30 days behind in payments...keep in mind, the process is evolving on a weekly basis with the lenders and the industry.

More lenders today ARE requiring sellers to contribute cash to a short sale to make up the lender's net approved amount. The reason is simple - the big government bailout is benefiting the lenders - not the homeowners as they portrayed it. The lender gets paid from the gov't stimulus behind the scenes for non-performing loans that are in default, so then the lender becomes greedier and looks for anything they can get from the seller in the short sale. Even clients with no savings are being asked to take out a second 401k loan to contribute - which is like digging a deeper hole for the seller to jump into...makes no sense...

If you have more questions, read my FAQ page on the answers just about any question you may have.
Tom Hinz
0 votes Thank Flag Link Sun Jul 12, 2009
I'm sorry to hear your situation. If you both are not working then you are qualified for short sale. I haven't seen anything so far that lender gets the money from homeowners savings accounts but if you have very large amount of money they may ask to repay some money in order to accept short sale.

You need to work with an experienced short sale agent so that they can negotiate with the lender to accept the short sale without paying any money because you need for future rent,food other living expenses..... so work with an experienced short sale agent who knows how to negotiate with lenders. Consult with your CPA or attorney for any tax ramifications.
0 votes Thank Flag Link Sun Jul 12, 2009
Hello Ellie, read my blog on Short sales

I specialize in short sales & credit reduction. Feel free to contact me if you have questions or ould like additional information
0 votes Thank Flag Link Sun Jul 12, 2009
Ellie, your best bet would be to talk to a short sale specialist. I have one who does this on a regular basis -- and she can advise you well.
If you are unable to make payments on your mortgage and need to sell to make it out from underwater, then you should be eligible.
Please let me know if I can help you further.
I wish you much luck!
Marney Kirk
Keller Williams Excellence
0 votes Thank Flag Link Sun Jul 12, 2009
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