Foreclosure in 08109>Question Details

Segafour, Other/Just Looking in Jersey City, NJ

ok bank has approved short sale, mortgage payments are not being made what happends next .friend is considering walking away / has basically walked aw

Asked by Segafour, Jersey City, NJ Wed Nov 24, 2010

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Based on what you are stating here, Your friend will have to cooperate and get the house listed ASAP! Aside from that Your friend should be paying atention to the taxes and utilities.. and the mortgage as they can.
Speak to a Realtor that knows short sales, get the property listed and get it donme. The sooner the better!

Tell your friend to contact a SFR certified Realtor to help get the short sale moving along !


John Sacktig
Broker Manager
Orange Key Realty
SFR Certified in Short Sale and Foreclosures
Direct: 732-213-1409
JSacktig@orangekeyrealty.com
4 votes Thank Flag Link Wed Nov 24, 2010
Yes, I know quite well what strategic default is.. It is a loop hole, but as Larry notes this does not at seem like the position of this person.

Your post has nothing to do with this person other then being related to it by short sale. I am referring to your use of this term as made up as you seem all excited about it.. and just attaching to people posting, some kind of.. I know about this, I know about this, look at me post.

So why bother?
2 votes Thank Flag Link Fri Nov 26, 2010
Jerry,

I read the article.. Did you make up this term "strategic default"? I do not understand what the point is here with your "article" on that site... There are so many people in trouble these days and and short sales and foreclosures are a default. Period. Sure there are some people that look to sell short BEFORE they are in trouble, that’s the point to what they are doing, saying , oh boy I am in trouble in three to four months.. and they ask for assistance with the bank in either a modification or, if already in trouble, a short sale. Help BEFORE the bank forecloses on them.

Your advertising below makes it seems as thought this is overall is a bad thing, tearing a hole in the economy.. But your article reads that you are happy about it, for it and then against it.

So really, what is your point?
2 votes Thank Flag Link Fri Nov 26, 2010
John, because the question wasn't exactly clear, was it? Is there something you don't like about the article I wrote? Im pretty sure I'm allowed to have a stand on strategic default whether its positive or negative, truthfully I could care less, but I do love to see the price of real estate come down, the lower the better in my opinion.
Web Reference: http://www.sjrates.com
1 vote Thank Flag Link Fri Nov 26, 2010
I don't think Segafour's friend's position here is strategic default. But he is not clear whether friend is buyer or seller. I would assume knowing so much about the payment history he is the seller.

Strategic default has been occurring for almost 3 years now. It's a loop hole for those who first purchased a home down the street or in another area, and short sale the home they are living in now. Getting a home similar or better than what they have now for much less and for that purpose only. To profit!

I had a client with PNC bank who brought this to my attention 3 years go. It is prevalent and now the gov't is on to them and will prosecute if they see the signs. No longer can you look for a short sale just because your home is underwater... The hardship you have incurred must exactly be that "a hardship" causing unaffordability of the home. Fannie Mae instituted greater controls and put lots of power in the banks to look for such fraud. Fraud is what they are calling it too.

I did not read Jerry's blog but I wouldn't think Strategic Default relates to his question here . Segafour appears to be looking for us to answer what are his friend's options now that the short sale has been approved.
My answer don;t move until you are absolutely sure there is a settlement date. Of course it is the inevitable that you will have to leave the home, just be prepared. Vacating the home could cause the bank to take action to foreclose, lock the house, possibly stall or negate the short sale in process. therefore causing you more credit harm in the future. I would negotiate a settlement before leaving and make a little money. a term most of us heard of "cash for keys"

LArry Sarlo
Weichert Realtors Turnersville
609-868-1171
lsarlo@comcast.net
http://searchnjforeclosures.com/
1 vote Thank Flag Link Fri Nov 26, 2010
Sometimes when I find a question on here that I have written the answer to on another website, I will just link back to the other website instead of re-writing the whole thing here. Also some sites I contribute to are purchasing my material and copy right it, thus I am not allowed to re-write it anyway, so I have no choice but to just link back to it.
Web Reference: http://www.sjrates.com
1 vote Thank Flag Link Fri Nov 26, 2010
All my articles are simply informative, nothing more. Theres no need to read into it as much as you are I guess. I did not make it up, you must be out of the loop, this term has been around for awhile now, if you google "strategic default" you will find almost 9 million sites referencing it, and there are even websites dedicated strictly just to that. The point I was trying to make was that if it begins to appeal to those who are not an any financial trouble, rather they are just unhappy that there house is worth less then they owe, and they realize that they can now buy the same house there in for hundreds of thousands less that they may start to "strategically default" and that if this becomes popular among the general public as it becomes easier to build credit, and the stigma of losing your home fades, that it could damage our economy to even greater extent then we are predicting to experience over the remaining part of this decade as the remaining 14 or more waves of foreclosures start coming due, for more on that you can click on the following link here: http://www.suite101.com/content/foreclosures-is-the-worst-be…
Web Reference: http://www.sjrates.com
1 vote Thank Flag Link Fri Nov 26, 2010
Not exactly sure who is walking away, Your friend is the buyer or seller?
If buyer and wondering what happens to home, will be up to the bank and how close the actual sheriff sale is. You could wait around but probably not worth it. Most banks will not put the house up for sale until they clear all title work and if it is Fannie Mae a clearance must come from them also.

If Seller is your friend. This happens a lot. If I were the negotiator or realtor I would have asked for some money. Still can. There is money on the table they can provide. Personally I would wait the short sale out, prepare to move to another place and when the actual sale takes place you are home free Accomplished the short sale... Now work on rebuilding credit and their life.

I have lots of useful scenarios and information on my website.


Larry Sarlo
Weichert Realtors Turnersville
609-868-1171
lsarlo@comcast.net
1 vote Thank Flag Link Wed Nov 24, 2010
Sega,

I believe you mean the owner (your friend), has stopped paying the mortgage and walked away from the property even though a short sale was approved. Is that correct?
Is the house on the market? Is there a buyer with a contract? Are you questioning whether the owner will be responsible for unpaid mortgage payments, unpaid utilities/taxes/sewer bills etc?

Too many questions to answer here, even in general statements. Plus none of us Realtors can give you legal advice, just information on what we have experienced during a short sale transaction. Every short sale has differences based on specifics of each case.

Best advice is have your friend contact an attorney who has handled short sales (if he/she doesn't already have one) and let the attorney counsel on what to expect based on the individual case.
1 vote Thank Flag Link Wed Nov 24, 2010
Sounds like a case of strategic default, this is going to tear a hole in our economy that no one was able to predict. I wrote a huge article on this not to long ago, if you want to read it just follow this link: http://www.suite101.com/content/strategic-default-threatens-…
Web Reference: http://www.sjrates.com
0 votes Thank Flag Link Thu Nov 25, 2010
Good question! The short sale process is a good alternative for those underwater on a mortgage who need to sell and avoid foreclosure. It has less of a negative impact on one's credit score.

I would suggest reading up on the subject at makinghomesaffordable.gov

Your friend should speak with a Realtor who knows how to navigate the short sale process, chances are they will also have a good real estate attorney who can help coordinate and negotiate with the bank on your friends behalf.

Good luck, help is out there!
Like John said, it might be a good idea to go to realtor.org and seek out a SFR certified Realtor, they have taken special classes to become familiar with the short sale and foreclosure processes.
0 votes Thank Flag Link Wed Nov 24, 2010
It sounds like you're saying that your friend's lender approved a short-sale (at a specific price), but hasn't found a buyer, and is basically going to walk away. Is this correct? Assuming that this is correct, please let him/her know that some investors (myself included) might be interested in the property. S/he can find some of the local investors by reaching out to one of the "We Buy Houses" folks, or s/he could reach out to me here.

Additionally, if s/he hasn't already found another place, then the investor(s) s/he opts to work with could also help to place him/her into another property (perhaps via a rent-to-own deal). The point is that s/he has other options.
0 votes Thank Flag Link Wed Nov 24, 2010
Hi Segafour,
You should contact an attorney for proper legal advice and my opinion which follows is not intended as legal advice, nor should it be construed by you or anyone else as legal advice. But, in my humble opinion and in experience, If the bank has approved the shortsale and now, (given your last post) there is no buyer, allow the Realtor to continue to market the property to get a new buyer. If your friend walks away and there is no short sale to offset what is owed to the bank, the bank may have the right to sue your friend for the amount of the mortgage, late fees, penalties, legal fees and escrow (taxes,insurance) amounts that remain unpaid after any eventual sale (meaning if they take it back and sell it). Your friend's best hope is a bank-approved shortsale which should include a clause that they will not pursue your friend in court for a deficiency judgment. Tell your friend to be patient.

I hope you find this information helpful. If so please mark it with a thumbs up.

Kimberly Thomas, Broker-Associate
Brown & Pope Realtors, LLC
Voorhees, NJ 08043
http://www.NJHomesNearPhilly.com
Web Reference: http://www.kimcanhelp.com
0 votes Thank Flag Link Wed Nov 24, 2010
Hello Segafour,
Thanks for your questions.
If the prospective buyer has walked away or thinking about it after the bank has approved the short sale try to find out the actual reason for deciding not to purchase the home. Did he/she just get cold feet and need some assurances or is it their mortgage company having a problem with his/her paperwork?
There maybe things to be done. If by any chance the buyer still does not want the house any longer then your Realtor can put the house on the market again and advertise it that it got approval and waiting for the right buyer.
Good luck in the sale of your home.
Best Regards,
Ines
Web Reference: http://www.inesdelacruz.com
0 votes Thank Flag Link Wed Nov 24, 2010
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