Home Selling in Odenton>Question Details

Smith, Both Buyer and Seller in Odenton, MD

My wife and I are parting ways. We have an 80/20 on our house, but the market is at 30k less than what we owe

Asked by Smith, Odenton, MD Wed May 7, 2008

Only one of us is in the position to maintain the 80% payment, but not the other. We could rent it out, but for how long until the market is at what we owe? Both lenders don't want to do a short sale or value drop on the notes.

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I couldn't agree more with Dennis, Odenton is a great rental market due to Ft. Meade and NSA and it is only going to get better. I attended a meeting last week that was all about the BRAC activity coming to the Odenton area and it is going to be huge, but it will take a while. The money is already in place for many wonderful improvements to the 175 corridor and there are literally thousands of people being asked to relocate with their jobs. I feel very confident that that area will likely begin to recover faster than most areas of Md. If you can be patient you may very well not have to take such a hit. You might also want to keep in mind the tax benefits of homeownership that you will not lose if you rent. I think it would be smart to at least contact an agent to see what you can rent it for. Good Luck!
Web Reference: http://mary-wagner.com
1 vote Thank Flag Link Thu Jul 16, 2009
Some basics
To have a lender agree to a short sale you need to be insolvent, meaning you cannot pay your bills. That does not seem to be the case.
You don't mention where you obtained the value "market is $30K less". I would have a Realtor (or talk to two or three) give you an estimatte of Fair Market Value (FMV) and ask for an Estimate of Seller's Net Proceeds" to see what you bottom line is.

You' ll also need a market report showing you real estate trends. Is the market trending up, down , or sideways? Most markets are flat, so that begs the question...how long would we keep it as a rental.

I would talk with a CPA regarding the tax consequences.
For example, let's say it's in great shape now. The home will probably not be treated as nice by a renter, so what would it cost to frix it up for re-sale?

How long witll the market be flat? This could turn into a long endeavor. Is that okay with you? Plus you have this property keeping you both in contact, making deciions, etc.

Divorce is one of the main reasons that homes are sold.
You probably have other assets that are being divided. Do you really want to invest time and energy in renting a home, for who knows how long?

Some lenders will issue a promissory note for the difference , at no interest, for a set length of time. Net that against the other assets, see where you end up.

PS I would vote from trying to reconcile first.
1 vote Thank Flag Link Wed May 7, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
Did you list the property, get an offer and present it to the banks?
0 votes Thank Flag Link Sun Jun 26, 2011
It is a good question and there have been lots of good answers.

The one component of your wife and you splitting is that you most likely would both prefer to move on with your live's as individuals and not own a joint asset. No lenders will ever want to do a short sale on a performing note. You clearly have a hardship and there is going to be a change in income as you no longer will have the combined income. In all likelihood, the first trust sounds like it will be covered in full if you decided to sell the house. The second trust will probably who takes the entire hit.

It is best to consult and get some legal and financial advise as you weigh your options. Realtors are qualified to give market analysis of homes, but in order to truly know your financial options you should get some advise from a specialist in that field. The link below is for a firm who specialize in negotiating bank short sales.

This is a company that I use that is a free service to my Sellers if they are put in the position where short sale is the best option. You may want to touch base with them and discuss your options if you do not want to hold the home as a rental property. You may or may not be a candidate for a short sale. However they may also be able to help you with a modification if they feel that is an option as well. Regardless, it is best to know all of your options before you make any decisions.

Please feel free to let me know if you have any questions, or to let ATC know where you got their name.
0 votes Thank Flag Link Fri Jun 24, 2011
No lenders want to do a short sale and they will tell you that they won't. If you are in a position where you cannot make the payment, that may be an option to pursue. The problem you have is the 80/20 as it sounds like you have 2 different lenders. The first usually will not participate in a short sale and the second wants to get something. They will take as little as a couple thousand on a second, depending upon the amount. Being over by Ft. Meade, rentals are moving quickly - we submit about 3 lease applications a week just between Dave and I in this area. The rental amount won't cover your mortgage if you purchased recently, but it may be enough to cover a good portion of it until the market rebounds. We're expecting BRAC to help with inventory levels and should start seeing a good improvement in this area in the next year or two. Hope this helps - good luck to you!
Web Reference: http://www.webberteam.com
0 votes Thank Flag Link Wed Oct 29, 2008
your looking at least a couple of years of renting. a first mortgagee will not take any less if teh second mortgagee is getting anything, in a foreclosure the second mortgage gets wiped out so the first doesnt have to take less. you are in a tough spot, you should work something out so whoever can afford to stay stays. make sure you do a good check on any tenants. good luck in working things out
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Fri Oct 24, 2008
If you would like a market analysis of the sale and rental market for Odenton let me know. I would be happy to provide it to you. If you would like to discuss your options overall I can give you some direction and answer some questions based on my experience.
Web Reference: http://www.kimandrenie.com
0 votes Thank Flag Link Thu May 8, 2008
first u and ur old lady should stay together, luv is forever right.. if not u could deed it over to tthe bank once ur past due, to avoid foreclosesure, or file bk if ur already past due, a good bk attorny can reaffirm a realistic value for the home, and that's what youll pay on, bottom line ur screwed.... maybe one of you can stay in it and make the mortgage payment..let me know how it goes
Web Reference: http://www.redealsusa.com
0 votes Thank Flag Link Wed May 7, 2008
Monique and Carlos both provide good advice. What they don't know, because it appears that they do not practice real estate in the area, is that Odenton is a great rental market because of it's close proximity to Ft. Meade, NSA, and major communting routes into DC & Baltimore. Your best option in this case may be to rent.

Best of Luck,

Dennis Skelly
Ricker Realty
0 votes Thank Flag Link Wed May 7, 2008
Do not let the banks bully you in to thinking that you cant do a short sale. The truth of the matter is that you can do a short sale. In the over all You need a expert short sale agent that can guide you thought the process. An agent that wont take no for answer from the banks. If there is a will , I can a sure you there is a way. Stand strong.
0 votes Thank Flag Link Wed May 7, 2008
Renting out is probably your best solution. Looking at the market is like looking into a crystal ball, it can be hard to predict. Also each market is different. I've heard reports that the market is expected to break and improve next year. You could take a year's lease and see where the market is at next year.
0 votes Thank Flag Link Wed May 7, 2008
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