Home Selling in 30038>Question Details

Marc Bolden, Both Buyer and Seller in Atlanta, GA

We have a townhouse in Lithonia, GA. We are currently renting it but are looking to either short sale or have the FHA loan assumed. Suggestions??

Asked by Marc Bolden, Atlanta, GA Sat Jun 25, 2011

Loan is current, mortgage payment amount is $823. We're looking to buy something else in another area but we have to get this FHA loan resolved. Ideally we would love to find someone to assume since from what we understand, if we short sale, we'll take the hit on our credit.

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I wouldn't say that a loan assumption would be the best solution for you right now; maybe in a perfect world it would be. An assumption DOES NOT automatically release you from liability. It only makes you secondarily liable to the lender for the mortgage, Meaning, your buyer would become primarily liable and if they defaulted on the loan the lender would hold you responsible for the payments. So then you don't have possession of the property, you get no benefits of rental income but you still have to pay off the loan. Remember, this is a buyer's market right now. Think about it; the buyer would have to agree to assume responsibiliy for the FULL balance of the loan. You said that you are upside down on the property now. So for example, lets say the balance is $150,000 but the market value is $100,000. If you were a buyer, would you take responsibility for the balance or would you look for a comparable property on the market for maybe $100k or less? There are probably at least 3 comps in your neighborhood listed at the lesser price right now. You have to think like a buyer b/c they have the advantage now. I am not a mortgage expert but I don't think you have to be to see who has the upper hand right now.
So, if you like, I can provide you with a free no obligation comparable market analysis for your property to see what it may go for in this market and what your competition would be. I also have a couple of charts that may be of some help to you. One is called "Options for Homeowners to Avoid Forclosure" and the other is "Short Sale vs Foreclosure" which tells you how a short sale will affect your credit. I also know of a few certified housing counselors that will sit with you and discuss your options and spell everything out for you. They are nonprofit organizations in the metro ATL area. Once again , good luck with your decision.
0 votes Thank Flag Link Sun Jun 26, 2011
Option 1:
Step 1: List house for what you owe for 90 days
Step 2: Call bank and inform them house was listed for 60 days and you are going to try 30 more days
Step 3: Call bank again and inform them that you cannot sell the home
Step 4: Ask bank if you can do a "deed in lieu of foreclosure"
Step 5: Give the title back to the bank and it is not recorded as a foreclosure. It will still affect your score but not your ability to buy.
Option 2:
Step 1: contact the county's section 8 housing department to find a renter
Step 2: Take the class
Step 3: Pass the inspection
Step 4: interview renters
Step 5: Tell the current renters they have 30 days to move out or buy the house from you at full price
Option 3
Step 1: Sell the house for what you can and pay the difference at closing.
Step 2: Freak out because you don't have the difference
Step 3: Buy an 2 investment homes for $40,000 each and sell them for $60,000 each and use the $40,000 to pay the difference.
0 votes Thank Flag Link Sat Jun 25, 2011
If you decide to short sale, we can help you. Feel free to call with any questions regarding 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.
0 votes Thank Flag Link Sat Jun 25, 2011
I'm sorry to hear about your troubles Marcb. You represent so many other homeowners out there currently. There isn't enough information in your post to really find the best solution for you. But from what you have provided, my question would be...."Would you like to continue recieving rental income from your property and maybe eventually pay off the mortgage? Have you spoken with your lender about any of your alternatives? Do you have a second mortgage, home equity loan or tax liens on the property? You would have to have a legitimate hardship before the bank would consider approving a short sale. There are many questions to be asked. I am currently representing a landlord in Lithonia renting out their townhouse also so I am familiar with the market out there. Marcb, if you email or call me I can provide you with some more information or refer you to the appropriate type of professional that is qualified to answer some of your questions.

Good luck to you sir.
0 votes Thank Flag Link Sat Jun 25, 2011
You are in a very tough spot then, like so many others in this economy. If you will call, I'll share some thoughts, but there are no easy answers.
0 votes Thank Flag Link Sat Jun 25, 2011
We have no equity in it at all. Property is way upside down... Amount owed vs. Value of property. We have a good renter currently but they are planning to move when lease is up. We just want to get out of it. Don't want anything out of it. Would love to not take a hit on credit we've worked hard on.
0 votes Thank Flag Link Sat Jun 25, 2011
You will need to put it up for sale to have someone assume it, Marcb, and even then the potential buyer will likely need a larger than normal down payment to assume, unless you will allow your equity to vanish. If you can keep it rented, then do so and find something else to purchase while the market is buyer friendly. Please call or email if we may be of further service. Good Luck!

Michael Hammond

0 votes Thank Flag Link Sat Jun 25, 2011
If you do a short sale, then you are not going to be able to purchase a new home for at least 2-3 years. After a short sale, you cannot do a conventional mortgage until 24 monthshave passed and then, you will need at least 20% down. For an FHA mortgage, you would have to wait at least 36 months and the minimum down payment would be 3.5%+.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Junper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Conventional | FHA | FHA 203K Renovation (Streamline & Consultant) | HomePath® |
HomePath® Renovation | VA | USDA | GA Dream
Web Reference: http://www.rodneymason.com
0 votes Thank Flag Link Sat Jun 25, 2011
You do not want to take a hit on your credit. Try to keep your renter in place. If you have a good tenant you may want to keep that property. However, you may want to purchase the next home with a conven-loan.
0 votes Thank Flag Link Sat Jun 25, 2011
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