Short Sale Candidate

Asked by Foo Guy, San Francisco, CA Thu Jan 15, 2009

I bought a condo in SF in '05 and paid $782. It is a 1br/1ba. I was single. I have since married and we have had twins. We need more space. Challenge is we are $100k under water on our mortgage. I put 0 down and the loan resets in late 2010. Naturally, I cannot refi and the new loan reset will be too expensive. Our combined income is $275k. I cannot modify the loan if I do not plan to live in the unit and rent somewhere else. So, the question is: does the birth of the twins and needing more space count as a hardship and thereby allow me to short sell? We are also not late on our payments.

As the process can be somewhat complicated, I plan to speak with a real estate lawyer next week.

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9
Steven Ornel…, Agent, Fremont, CA
Thu Jan 15, 2009
Foo Guy, again, I'm not advocating a Short Sale and only you really now how serious your financial situation is/will be. I would again underscore the negative affect on credit.

David is correct, there is a form of "qualifying" for a Short Sale in the sense that the lender will want you to present a financial case for the short sale; however, in reality, the process is more closely related to "risk analysis." Meaning, the lender will make a business decision based more on the probability of whether a Short Sale would net the lender more (or shall I say, less of a loss) now than a foreclosure later.

If you would like a "Q&A" on the short sale process contact me offline via email and I will send it to you.

Best, Steve
1 vote
Steven Ornel…, Agent, Fremont, CA
Fri Jan 16, 2009
Dominique, you wrote:

"You can get financing for a new home after a short sale. It is a common misconception that you have to wait a certain time period. "

Could you please provide your source/cite for stating this?

-Steve
0 votes
Jenny Talasa…, Agent, San Diego, CA
Fri Jan 16, 2009
Dear Short Sale Candidate:

Another option you have is called a short refinance. This will depend on who your lender is. You must be current to do this. it is where the bank will write your loan to 97% of the new lower value. Please email if you have any further questions.
Also, you could attempt a modification pending on how long you planned to be in the home and of course who your lender(s) are.. Please email mortgageforlife@gmail.com or go to http://www.usadebtexpert.com

Thanks
Jenny Talasazan
www,usadebtexpert.com
Web Reference:  http://www.usadebtexpert.com
0 votes
Dominique Re…, , 93704
Fri Jan 16, 2009
You can get financing for a new home after a short sale. It is a common misconception that you have to wait a certain time period. Please avoid credit counsiling. This will make it very difficult for you to get mortgage financing in the future. Talk to a good realtor about the short sale process. I would be happy to refer you to a good one in your area. If you have questions I am available anytime or you can check out my website for additional information.

Thank You,

Dominique Ressurreicao
Co-Branch Manager
American Pacific Mortgage
559-892-6812
0 votes
Jed Lane, Agent, Petaluma, CA
Thu Jan 15, 2009
Call the lender first. You probably will not like the answer as there is no good news here for you. The only way to protect your credit is to stay and continue to pay the mortgage.
To say you can do a short sale anytime is facile. To complete a shoprt sale you have to get the lender to agree to take less than you owe. You have almost no control over the situation.
If you could stay in the unit, I know it will be difficult, but the bank might negotiate a better new loan than the reset amount. They can do other things for you and it will keep your credit in good condition and you can sell when the market comes back.
It seems that you can take the hit on your credit, and as I said you should be in touch with Credit Counseling before you do, or you might need to stay and ride this out. It could be over just as fast as it came on. When credit becomes more available we still have more buyers than properites.
Seriously though, get in touch with the California Consumer Credit Couseling Service. They can give you advice that you need to hear.
0 votes
Sally Rosenm…, Agent, San Francisco, CA
Thu Jan 15, 2009
Dear Foo Guy,

Talk to your current lender immediately. See if they can work out a payment schedule. Go to my website and contact David Gellman (see Resources), an excellent real estate attorney. Also under Resources you will lend mortgage brokers. Call Serena Greening. See what they can do. Your lender needs to approve the short sale in order for it to work. A realtor can also help you with your lender.

Good luck,
Sally
Web Reference:  http://www.sallyrosenman.com
0 votes
Wilma L, , San Mateo County, CA
Thu Jan 15, 2009
Yes definitely talk to a trusted loan agent to see if and any options that would be appropriate for your situation.
0 votes
David Tapper, Agent, Burlingame, CA
Thu Jan 15, 2009
You cannot just short sale anytime you want. You may not qualify, especially with your income. The two most common reasons are divorce and loss of job. Not adding to your family.

Please, before you do anything, talk with your lender to discuss your options. Or at the very least, a banker you trust.

Dave Tap Tapper
Realtor
Cashin Company
http://www.Davidtapper.com
Web Reference:  http://www.Teamtapper.com
0 votes
Steven Ornel…, Agent, Fremont, CA
Thu Jan 15, 2009
FG: you can make the decision to short sale at anytime, the question is whether you want to take the hit on your credit for at least 2 years (with the forbearance showing for 7-10) and also be blocked from purchasing another home for 3-5 years via lender guidlines.

If it were me I would try and stick it out. Might have a different view if your place were in Stockton...

Best, Steve
0 votes
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