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Medical hardship is definitely recognized by banks.
If I were you, I would purchase a new house before doing Short Sale. It would most likely be easier to qualify for you and your wife now, considering tough mortgage environment these days and tight requirements to get a loan. You new purchase probably going to be considered by new lender as an investment property, as you already have a primary residence and you have a substantial downpayment to qualify for a conventional loan which won't require mortgage insurance (MI), so you can avoid a lot of hassle. I don't know about VA loan requirements for conventional loans, but this question could be answered by your lender. If you don't have a good lender, I will be happy to refer you to most reputable and experienced in VA loans direct lenders for free consultations. Please do not hesitate to call me anytime with any questions: 702-460-4702, Tatiana, Realty Executives. I hope I answered some of your questions and was able to help.
I signed a contract, the contract stipulates exactly what happens if I pay, and if I stop paying (though I am still current). I went into this house with good intentions. Risk was taken on by both parties. I will loose around 60K that I have payed as down payment and in renovation costs, not to mention my perfect credit will be ruined. But everything would have to be weighed as business decision. No hard feelings. We are in a world where the irresponsible are rewarded and I'm not just gonna sit back and get screwed. Are you saying I should've bought a mansion back when the banks where practically giving away loans? Then maybe I would have a legitimate hardship, right?
Why would I throw money into a hole? I would be better off paying cash on another home and even get the possibility of capital appreciation. It's a loss- realized or not! This is the business world Anthony. Welcome to it!
You don't say why you want to buy another home. I would explore other options, like a HARP refinance or a HAMP modification and find a way to make the current home work. But I would definitely stay away from any strategy that is not 100% on the up and up.
I wouldn't encourage you to pursue the strategy you have described.
You are responsible for the two notes, and a short sale does not necessarily forgive what you owe. In any event, once you start dashing for second base - applying for a new mortgage - the bank is going to see that you still have your foot planted on first (that you didn't pay to close out the other notes). The short sale disqualifies you for another mortgage for at least three years. Regardless of what you were told, you won't be approved for a third note in this scenario.
You don't do yourself any favors by declaring that you can't afford your mortgage when you make a request to short sale. The first two lenders may never get wind of your scheme - at least not until they pull up your credit again. This is why they pursue recovery of their loss after a short sale even though the homeowner declares financial hardship. If the borrower makes a sudden recovery, they will go after the short seller. I think they go after people even if they don't appear to recover.
If you buy a second home and then declare that you have a hardship and want to short sale, you're still going to be on the hook for those first two notes. In some states, the lender has recourse for seven years. That's plenty of time to figure out what happened and file a lawsuit.
If you're dead set on pursuing a second home, then use that extra cash to your advantage.
You might consider a plan involving an investment house, or two. Talk to a real estate agent there that is also a CPA. You may find that you are in a great position to create income from a second and possibly third property. If rents rise, you're in a sweet spot. You could position yourself to pay off that second mortgage after several years and put yourself on much more solid ground.
Las Vegas has experienced the worst depreciation of any city in the nation. That also means it is more affordable to purchase a second home. It's a bit like "averaging down" on a stock purchase. If you are cash rich, then you're also in a position to negotiate a better price. That scenario resembles an HR (home run) when homes begin appreciating again. If the appreciation never happens, you still have that passive income working for you.
You may want to get some advice on managing properties, or let a real estate office do that for you. Final note: If you do buy a second home, make sure you tell your lenders which home you will occupy. If you change your status (move from one home to the other), the lender will want to know this, too.
And, by the way, the averaging down strategy probably is what the lender was thinking you were up to when they said you would qualify for another mortgage. You should talk to them again after you have had a chance to interview several CPAs and decide what you will do.
PML of Longmont, CO
David Cooper. Foreclosure Specialist with 35 Years Investing Experience. Receive a FREE List Daily of Low-Priced, Bargain Homes with Great Cash Flow for Investors. See website or Call +1-702-499-7037
Please see my blog with a full list of tips and advice on selling your home through a short sale.
David Cooper. Foreclosure Specialist with 35 Years Investing Experience. Receive a FREE List Daily of Low-Priced, Bargain Homes with cash flow and 10%+ roi. See website or Call +1-702-499-7037
Realty ONE Group, Inc.
"Lease to own even after a short sale." Here's how it works:
1. Find the home you wish to buy.
2. Investor buys the home for you.
3. Lease to own from the investor.
Go to http://LVAffordableHomeSales.com
DAVID COOPER Foreclosure Specialist with 35 years experience in investing in Las Vegas, Free lisdt of bargain homes, see website or call +1-702-499-7037
1.) I would not trust the bank when they say that they will give you a loan (sometime in the future); they do not have the future information on your credit, etc. The normal waiting time to buy another house after SS or Foreclosure is 2-3 years.
2.) To be able to do a Shortsale, you will have to submit a Hardship letter to your current lender; explaining what your hardship is; why you need them to absorb $131,000.
3.) If you have 20-50% cash for a down payment, you are going to have a tough time proving hardship.
4.) Nevada is apparently NOT a non-recourse State: That means that you bank will look into suing you for the $130,000.
5.) If you still have your VA, you probably should use it; but go in there now and talk to them about your situation; I was in Viet Nam and I know that they want to help us and will go the extra mile.
6.) You might consider the combination of Renting out your house, using your cash for the negative monthly expense, and using your VA to buy another place. Try to visualize where you will be 3-5 years from now doing this.
You may want to read some of the BLOGS we have posted here on Trulia: Two in particular that I wrote are "DEFICIENCY JUDGEMENT" and "UPSIDE DOWN".
Good luck and may God bless
All the best,
Prudential Americana Group Realtors
If you are not behind the ability to get qualified for something else quicker is possible with some new loan programs---
As far as the short sale- we are experienced with a team of short sale negotiators that stay on top of your sale to get it closed as fast as possible---
Contact us if you would like to consider utilitzing us to help you with your sale---
and visit the website to recieve a ton of information regarding the short sale process-------------
What I do that sets me apart from the others is I meet with you and we talk about possibilities with government programs, legal alternatives and real estate solutions. We can stratagize a plan for YOU, not the bank. I am what's called a home retention counselor and short sale expert and would like to discuss your options, solutions and strategy. Setting the scene always makes a situation and outcome better. Maybe I should call myself a scene setter or situation advisor/director...
I would love to work with you.
Visit me at http://www.NVhousingsolutions.com or give me a call at 702.656-1818.
Realty One Group
Let's look at the specifics about selling your home, speak with the mortgage holders to verify they will let you do a short sale without missing payments, and review liability to keep you out of any issues later on.
Verify with your lender that you are short selling and still wish to purchase.
I have been getting short sale approvals and closings with deficiency judgment waived and no missed payments.
You have lots of options. Let's discuss what is the best end game scenario for you.
Keller Williams Realty
The answer is clear. Yes, you can short sale like everybody else who has done it already. There are different opinions and answers and you will get confused. That's why you have to choose a Realtor and start working with him/her. Following a professional steps will lead you to a successful outcome.
Good luck and if you need my assistance, please contact me.
Attorney, Broker-Salesman, Realtor
Van Group at Realty Executives of Nevada
I have Team members that the ONLY thing they do is process Short sales and I would be happy to give you the names of the people who do short sales full time AND a lender who can answer any questions you have on how this will impact your future loan applications.
As in anything the more people you talk to the better you can understand your options and choose what is in your best interest.
So what do you do? Here are some possibilities if your wife can't qualify for a loan;
1. Short sale the home and rent for several years.
2. Short sale the home and look for a home with owner financing. With a large down payment and slightly above market interest rates, it would be attractive to some sellers.
3. Short sale the home and with a large enough down payment you can get a "hard money loan" regardless of credit score, often. But there are high fees and high interest.
4. Depending on who owns the 2nd mortgage, it can sometimes be reduced significantly or made to "go away" for a settled amount. I have seen this during a short sale--that helped convince the 2nd to settle BEFORE the short sale even consumated. With the 2nd gone/reduced, your mortgage may be low enough that you may want to keep the house. Your credit will still be damaged to some extent however.
5. Buy a new home now and rent the old house out for awhile. You can decide the disposition of that house later (including possible loan mod(s). Do note that "buy then bail" could be considered loan fraud. So, if you buy a new home, please have the intent to keep the old house.
The summary is that with a large enough down payment, there are some options for you. If your wife's income/credit score qualify you for a conventional loan, then you have even more options.
You ask many questions. I suggest to interview a few Short Sale Specialists to get a feel what they recommend. You may also want to look for a SSP that works with an attorney. These arrangements make a powerful team to assist you in getting to your future goals.
Be sure that everything that the SSP tells you is provided to you written down so you may refer to the information later. You will also want the SSP to be able to answer questions from the other professionals that you are questioning.
It sounds like you may be considering the Buy and Bail option to dispose of your nonperforming asset (ie: your house). The Lenders are looking for this action when looking to approve a short sale and approve an additional loan for the 2nd property. This action is not only unethical, but may also be considered mortgage fraud. You and an agent knowingly participating in this action may also be guilty of mortgage fraud. If the intent is to defraud the Bank/Investor of your existing property, it is MORTGAGE FRAUD.
The real question is: Do you want to do business with a licensee that will knowingly participate in MORTGAGE FRAUD?
There are many Mortgagee Letters from Brian Montgomery (Assistant Secretary for Housing-
Federal Housing Commissioner) about Buy and Bail issues. I suggest you locate them on the web or locate a Realtor that is familiar with the issues.
I will be glad to chat about the issues and have attorneys available to back up our actions if needed).
Please contact me immediately if you know a person that cannot make their mortgage payments. I will work with them to avoid foreclosure or bankruptcy at no charge or fees to them.
Steven Goldman, CRS
Certified Short Sale Professional (CSP)
GRI, ABR, SRES, CNHS, PM, CCI
Realty One Group
Las Vegas, NV 89135
Web Site: http://www.teamgoldman.info
I am so sorry to hear what you are going through right now.Unfortenatully many people are in your situation.If you already decided to go to short sale is great,but you should actually discover all of your options before hand so you can make an educated decision which one is best for you.You should consult with attorney and tax advisors.
Also consider interviwing Realtors to see which one is a good fit for you.
Call or email me should you have any additional questions.I would be happy to help.
Realty One Group,Inc
No problem. Yes, you can short sale this house. You should buy your next home first, and move. Your wife's credit will not be affected by the short sale, because you said she is not on the loan. Feel free to call me anytime and I can walk you through the process.
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.