Sink, Swim Or Run!!!!!!!

Asked by Dilligent Turtle, Mullica Hill, NJ Tue Jul 28, 2009

OK, Here is the situation. I was a very successful entreprenuer few years ago, was making a ton of money,and of course the recession came, wiped my sales and bank account out, and I am facing a mortgage that went from 3k to 5k when the rate got adjusted. After my savings got wiped out, I havent paid the mortgage for 8 months. The bank will not accept any type of payment plan, agreement or anything. Do I just walk away? They say I can't short sale because I owe them too much money and the mortgage is more that the home is currently worth. Any suggestions?

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Steve Kappre’s answer
Steve Kappre, , Gloucester County, NJ
Fri Jan 8, 2010
Pat is right - there are more options each day that goes by, and depending on the holder of the mortgage, you may have many options. When banks get desperate enough, they will make things happen. They don't want your house. And they don't want bad assets on their books. Also, owing more then the value is just what a short sale is for. I wish you the best with this.
Web Reference:  http://njmortgageblog.com
0 votes
Jack Vollenb…, Agent, Flemington, NJ
Thu Jul 30, 2009
Hi Ray,

All good answers below. The lender is giving you the cold shoulder at the moment which is not very smart financially speaking. If your income is less than your expenses, you experience a financial hardship and therefore qualify for the short sale process. Back taxes not paid? A smart bank will pay those to protect their interest in the property or risk losing the asset in a tax sale.

You need a specialist to work on your behalf that can talk some sense into your lender. I specialize in REO and short sales and do these negotiations on a daily basis. Call me if you want me to start working on this for you.

Jacobus "Jack" Vollenberg
RE Appraiser - Vollenberg Appraisers
Asset Manager - ERA Statewide Realty
Vollenberg@iname.com
Cell (973) 590-0142
1 vote
Gregory Tres…, Agent, MULLICA HILL, NJ
Tue Jul 28, 2009
First you need to know what they based that information on, meaning has your home been appraised recently, what are they going by when saying your home is not worth a certain amount. 2nd what is your financial position at this point? are you behind on other bills, taxes,etc? Trust me you are not alone on this. Many people have falling in this hole but there still might be hope. If you would like to talk, maybe I can come up with some suggestions or fixes for this situation. Without knowing the history or your home value and teh values around you it's very tough to give you an answer. Let me know if you would like to get toghether and discuss this. My cell number is 856-816-6995 or email me gtresch@comcast.net. I would like to try and help and it;s not just about money to me.
1 vote
Pat Settar, Agent, Mullica Hill, NJ
Tue Nov 24, 2009
Hi Ray,
Many homeowner s who were told just a few months ago they were not eligible for a repayment plan are finding out that NOW they are. Be sure to request a payment plan package from your lender asap.
The very purpose of a short sale is to sell it for less than what you owe, which is exactly what the lender will end up doing if it is foreclosed on. There are many companies that are now calling themselves short sale specialist, please be aware. Only use a company that has been referred to you by a trusted professional. I;m very sorry for your situation Ray, please know that you are certainly not alone.
My best,
pat settar
Web Reference:  http://www.PatSettar.com
0 votes
Stephen Burke, , Philadelphia, PA
Wed Aug 12, 2009
Hello Jay

The customer service representative you talked to from your lender is incorrect. If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual's public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).

Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.

More more information about your options visit http://NJForeclosureOptions.com

Thank you Jay for taking the time to read this reply.
Stephen Burke,CDPE
0 votes
Bridget Cella…, , Turnersville, NJ
Tue Aug 11, 2009
Ray,

I have read through the other responses that you have received and I feel the pain in your post. This is a very unfortunate situation that is hitting many families in similiar situations to yours. I have helped some families through short sales and yes they are very daunting and stressfull for all parties involved.

What ever decision you make will be the right one, the lender that you are speaking to has multiple, sometimes thousands of cases like yours that they are dealing with, they have become numb to the fact that their decisions are affecting the lives of others.

It is possible for you to do a short sale, there are many attorneys, realtors and servicing groups that can assist you through this process. Sometimes you will try to do a short sale and it ,ight not work out, time wise or other. Shorting your home will make less of an impact on your credit, not much, but some.

Best of luck to you in what ever you decide to do!

Bridget Cella
Weichert Realtors
609-352-1667
0 votes
Dilligent Tu…, , Mullica Hill, NJ
Fri Jul 31, 2009
Mr. Holt. You give a lot of good information in your answers, But you do answer some with an edge. Maybe you have a no nonsense approach to your customers or potential clients, But you catch more bees with honey. Or maybe I'm totally wrong and you don't really need clients because your circle of influence is large enough to feed you listing for the rest of your life. I'm not sensitive, Just very observant. I see you post a lot of answers here on trulia, and your style of post goes like this: let me insult you, Then offer some knowledge, then wish you a happy day. Coming from a consumer, you come off as the "arrogant all knowing i am always right and better than everybody else type". In your second post, You further made the case for my "stupidity" by insinuating that I cannot read and comprehend words. to quote you "Ray: Your tale just reminds us that stupidity is contagious and I'd advise you to stay away from visits to your lender." Thats funny, I saw no reference that was aimed at my lender being stupid, I think it read that I was stupid, and I need to stay away from my lender. Trust me, I take no personal offence, but if thats the way you want to be seen on the web to potential clients, thats your choice. I know your probably going to post that you don't need my advice, But you will be more successful if you tone it down a little. If you want to position yourself as a leader in your industry, you have to project yourself as a knowledgeable authority in your posts, Not your current persona "Lee Arrogant, Ultimate SuperBroker Extraordinaire." . Weichert has some really good Real estate schools where you can freshen your skills. Also here is a link to an article on good customer service.
0 votes
William Leigh…, , New Jersey
Fri Jul 31, 2009
My, my, aren’t we sensitive. Ray, my indication of stupidity was, perhaps poorly put, was directed at the lender who you report was unwilling to consider a short sale, because, to quote from your original question, “They say I can't short sale because I owe them too much money and the mortgage is more that the home is currently worth.” (The classic definition of a short sale, isn’t it?) My accusation was not at you but seeing how you interpreted my “harsh’ comments, perhaps one of us might not be fully considering how to say or how to read what is said.

My comment was that you seem to have the short sale criteria filled to the maximum. I recommended looking for someone who might be versed in these deals and mentioned a couple of “types” that might be willing to help you, with a profit motive.

Jack Vallenberg seems ready to do just that. He has had some darn good answers here, and while I have never worked with him, I’d recommend talking to him. I have no personal interest in working as far south as Mullica Hill. Perhaps Mr. Vallenberg won’t mind the 80 mile, 1 ½ hour trip or can do things over the phone. Simply put, I’m much closer and do mind, so I am not going to be your agent. (As if I had a chance.)


With the current state of the economy, there are a ton of options and you should carefully consider the one that “clears the decks” for a future life, which you surely should position yourself as best you can, to enjoy to the fullest. Do read into things a little more carefully, because the nicest person may not be offering the best advice.

What I said in my “harsh” initial response, meant then and repeat now, is best of luck.

Bill Holt
0 votes
Dilligent Tu…, , Mullica Hill, NJ
Thu Jul 30, 2009
Hey Jack, I really liked your answer. Not as harsh as Mr. Liegh, I already feel bad in this situation, don't need to be called stupid. and your experience with REO's would surely help with my situation. I will be contacting you soon.
0 votes
Gina, , Turnersville, NJ
Tue Jul 28, 2009
Hi Ray:

I agree with the others. You can try for a short sale. Absolutely recommend getting an attorney which the bank "should" pay for along with the closing costs. You will need a hardship letter, financial statements and income tax statements to send to the bank for them to approve a short sale.

Good Luck to you!
Gina Fagnani
Century 21 Hearst Realty
GinaFagnani@aol.com
0 votes
D. Derderian, Agent, West Chester, PA
Tue Jul 28, 2009
Send me your email I will forward the 9 Options you may have:
0 votes
Dilligent Tu…, , Mullica Hill, NJ
Tue Jul 28, 2009
Thanks for the reply, i ALSO forgot to throw in I owe back taxes (they are 1000.00 a month) and that i was told I cant short sale until they are paid. Thanks for the advice..
0 votes
William Leigh…, , New Jersey
Tue Jul 28, 2009
Ray: Your tale just reminds us that stupidity is contagious and I'd advise you to stay away from visits to your lender. Chantal has the right idea but will they listen? The definition that they have given you: that the house is not worth the amount you owe is THE DEFINITION for the need for a short sale. If it were worth more than you owe, you could just sell it and downscale, now couldn't you?

I take minor objection to the statement that a foreclosure will be on your record "forever." While that may be so, you should be able to get another mortgage in the future. It all depends on how successful you are and how long you wait. Last I heard, debtor's prison was no longer an option for the lender.

There are attorney who specialize in the short sale deal and it's quite a specialty. How you afford them is beyond my comprehension. I have a sneaking suspicion that most of their fee comes from the lender. In some deals, the lender avoids the costs of foreclosure and resale and some smart money guys are buying and flipping the properties same day, with a smart process where they make a small profit as the arbitrage for having a deal in place. That sort of thing may help all parties to the transaction but the lender has to listen first.

Best of luck.

Bill Holt
0 votes
Chantal Koni…, Agent, Basking Ridge, NJ
Tue Jul 28, 2009
Hi Ray! I would certainly think that you could try a short sale. Owing more than you can sell the home for is one of the very premises of a short sale. And, you can clearly show a change in your financial situation/hardship since the time that you purchased. I would highly recommend that you find someone very well versed in short sales and give it a try. Perhaps with someone else on the phone, the answers could come back differently. If you walk away, a foreclosure will loom over your public record forever. If that's what has to happen, then so bit it. But, why not at least try to short sale? The consequences to your credit and public record are a world better with a short sale vs. a foreclosure; and you don't have anything to lose in trying. I hope that helps and wish you the best.
Web Reference:  http://www.KonicekGroup.com
0 votes
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