Home Selling in 30328>Question Details

Atlmichelle, Home Seller in 30328

Can we get an affordable loan to cover the difference of our mortgage from what we can sell our condo for?

Asked by Atlmichelle, 30328 Tue Oct 25, 2011

My husband purchased a condo by himself before we even met. The place is small and we want to sell and buy a home so we can start a family. Problem is, the condo is underwater 50K and the HOA has a 2-3 year long list of people wanting to rent, so that is not even an option. We are willing to take a loss so we can move on with our lives. Will the lender work with us to pay off the difference from what we sell the condo for? What other options do we have since we can't rent? We also are not willing to just "stay" in the condo. Its far too tiny, even for a baby and we wish to move closer to my family anyway. We've already waited 3 years hoping that the economy would improve and that we would take less of a loss, but things have only gotten worse and we are running out of time to have a family as we are already in our 30's. Also, if we are forced to foreclose, will my credit be fine since my name is not anywhere on the loan?

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Most problems contain solutions when you break them down to individual components. You need a bigger place, someone else needs a smaller place. Have your Realtor prepare a list of properties that meet your needs. If you are talking about staying in the same town this works better. You call the listing Realtor on every property on the list and ask if their seller would be interested in trading for a condo. If the answer is maybe, have your Realtor get involved. Based on the size of the list your Realtor may not have time to call every listing, besides, the uniqueness of this approach will get more attention.

I would contact your lender ASAP to open a dialog about helping you facilitate this maneuver. The secret formula I learned many years ago is to advertise: Have free and clear condo (property) plus cash, want to trade for a home in the ____ area.

Make your condo free and clear by working with your current lender to finance the home being traded for. Even if you are underwater on the condo your current lender would be better off with this unorthodox structure. They may need to offer you a portfolio loan or combination of first mortgage and an unsecured note for the difference. Your lender comes out whole and so do you if you find the right opportunity. If you find the right seller it is possible to come out ahead instead of facing foreclosure and all that entails. Hope this is helpful,
1 vote Thank Flag Link Tue Oct 25, 2011
Personally speaking, I think you could find someone that just went through a foreclosure or short sale that want to buy expecially if they plan on staying any length of time. I run across people that dont mind paying a premium to get an owner to finance long enough to get their credit straightened out. For both you and your husband to qualify for a new mortgage generally only takes 6/12 months of verified payments from the buyer. Who cares if it invokes the due on sale clause, as long as payments are being made banks don't really care who makes the payment.
1 vote Thank Flag Link Tue Oct 25, 2011
I am going to semi-retire in the next few years, and I like Dunwoody area, and looking for something to buy so I don't need to take care of the yards. I understand your situation, and want to see if I can help. If you like, you can contact me via email: angielee05@hotmail.com
0 votes Thank Flag Link Thu Mar 15, 2012
Jim, I'm pleasantly surprised and impressed. Most mortgage brokers/bankers I know don't think that creatively--unless they're also investors. I suspect you either invest or work quite a bit with investors.

Another variation on Jim's and Steve's suggestions is to collaborate with an investor to do an equity swap with seller financing.

A third option--provided you'll have enough cash and your next property will have enough equity--is to ask his lender to do a substitution of collateral for the remainder.
0 votes Thank Flag Link Thu Oct 27, 2011
Best thing is to get you buying by yourself this time.
The HOA is the key problem, but good thing you intend to pay the difference.
Then, the best plan is to get the maximum you can for you condo
0 votes Thank Flag Link Thu Oct 27, 2011
First of all, let's look at complications from short sale, then options to do. A short sale is just as bad as a foreclosure. Your husband won't be able to use his income to help you qualify for 3 years. It may not affect your credit but it may affect your ability to buy because you lived in a home that was short sale and you are responsible for that debt ethically (according to an underwriter) especially if you claimed the interest as a tax write off or you are on title.
I hate to say it, but many people push short sale over foreclosure because they get paid to do it. There is no commission in a foreclosure. Short sale may result in a promissory note to the lender for the difference and you can ask them for that OR have them forgive the difference. If the latter, foreclosure is the same thing.
So, what can you do? Go to your local county housing department and tell them you have a place to rent for section 8 housing. The government pays rent for those who can't. I bet the others didn't think of that. Get a bank loan for the difference. I have a bank in Vegas that lends up to 250k unsecured if all 3 scores are over 700. Offer an owner financing option to someone with bad credit. Refinance the loan prior to leaving. Obama just removed the ceiling cap on values, meaning it doesn't matter how far upside down you are, you can refinance. Offer half the rental payment that everyone else is offering.
0 votes Thank Flag Link Tue Oct 25, 2011
Talk with your current mortgage holder and ask them what they suggest. Worse case scenario might be where you short sale and the mortgage company retains the right to collect the 'short' amount.

Also, we work with an attorney who is exclusively handling short sales. Contact Amy Williams at the Fryer Law Firm (contact me for phone number is necessary). She can probably help you navigate this in the best possible manner.
0 votes Thank Flag Link Tue Oct 25, 2011
Your credit will not be harmed, so you are able to purchase under your name if you credit score is 620 or over.
As far as I know your lender will not work with you if you sell it, they want all the money once it changes ownership. Do you have a family member who would like to stay in your condo you maybe able to do so without waiting 2-3 years check your bylaws. Before you let your home be forclosed on check to see if a short sale is an option for you.
0 votes Thank Flag Link Tue Oct 25, 2011
You can sell this condo if you take the loss lenders normally do not take the loss unless it is a short sell.If you do not have hardship short sell does work. You can get bridge mortgage because you selling you condo.Good luck.
0 votes Thank Flag Link Tue Oct 25, 2011
Yes, your credit will not take a hit, his will.

I don't understand the 2-3 year long waiting list to rent part - why not rent it if there are that many people backed up waiting to rent?

You could talk with the lender to find some ideas, maybe a loan modification could be worked out or deed for keys where you just walk away or sell and bring money to the table to cover the banks loss.

Good luck with it.
0 votes Thank Flag Link Tue Oct 25, 2011
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