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Asked by AdamB, Washington, AR Sun Jan 2, 2011

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Alma Kee, Agent, Tampa, FL
Sun Jan 9, 2011
In Florida you may be responsible for any deficiency (including legal fees, court costs, etc.) so it may be foolish to increase your liability by letting the townhouse just foreclose.

You may be able to continue to pay your mortgage on time and then work out a promissory note for the difference if you want to sell. Some lenders will accept less than full value on the promissory note.

If you accomplish a short sale and are never late on your mortgage, you can instantly qualify for your next mortgage with conventional financing.
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The Roskelly…, Agent, Gambrills, MD
Sun Jan 9, 2011
Hi Gsnow,

What you are suggesting as a course of action is a federal crime...aka mortgage fraud...aka buy and bail. I understand your frustration. The majority of homeowners who purchased after 2003 are in the same position. I don't know of 1 single person who has been approved for a loan modification that was of any assistance. That program is a massive failure and waste of money.
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Darren Nels…, Agent, Fort Lauderdale, FL
Sun Jan 9, 2011
I am local to you and would be happy to show you some rentals in the area. Please give me a call so we can arrange a meeting.
Darren Nelson
Coral Shores Realty
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Voices Member, , Red Wing, MN
Wed Jan 5, 2011
What everyone seems to not be mentioning is that you need to be able to qualify to but the new home first. To get a new mortgage you are going to need to be able to qualify for both the current place and the new place. Plus if you are that upside down on your home the new lender will most likely make you have 6 months of reserves for the payments on your current mortgage. The lender will want to make sure that you are not going to do exactly what you are planning on doing so they are going to make sure you are able to carry both mortgages.
If you have all those reserves to qualify for the new home then your current lender will most likely not approve a short sale because they are going to want to see your financials and will see your reserves.
If you decide to try to hide or move those reserves then you are in the fraud category.
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Lebau, , Los Angeles County, CA
Wed Jan 5, 2011
both foreclosures and short sales will wreck your credit. i would purchase a new home, and THEN either short sale or foreclose on your previous home. remember, once you are in your second home, you have the upper hand for the first home. you can stop paying any time you want
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Tammy Hayes, Agent, Port Charlotte, FL
Wed Jan 5, 2011

Short sales are just about seems like you can't get away from them. Many sellers, loan officers and Realtors say they know a lot about short sales, but don't know how the short sale process works or even why a short sale is a better alternative to a foreclosure.

A short sale will enable the seller to purchase a home about 2 years after a short sale completion while a foreclosure will make you wait 5 years. In addition, short sales are better for the lender and it will keep the house occupied, with water and electricity still on and also keep the lawn mowed. Plus the bank will lose less money through a short sale.

No Foreclosure - foreclosures can be a hard and stressful process for a family.

Being Proactive - facing a foreclosure head on will help give you some control over the process.

Start Newer, Faster - minimizing damage to your credit can help you and your family get back on your feet faster.

May not owe anything after the short sale - you can try asking the bank to cancel your debt altogether. It does happen, but not all the time. Primary residences are usually treated more favorably by the lenders.

There is still damage to your credit - when a short sale is done, it is still documented on your credit but won't have the same impact as a foreclosure for most creditors.

Tax Consequences - there may be tax consequences if the bank forgives the debit and will issue a 1099 to the IRS for the amount of debt forgiven.

Bank could demand payment for their loss - the bank doesn't have to forgive the debt. They are able to ask you to pay them back for the difference on the sale and what is owed, but you will need to agree to this.

There are no guarantees in a short sale - whether the bank will approve the sale or forgive your debt, but short sales offer a better alternative to minimize the downside of facing a foreclosure.

Disclaimer -There can be legal and tax consequences. You may want to consult with an attorney or tax specialist before attempting a short sale. A real estate agent cannot give you legal or tax advice.

DO YOU QUALIFY? - Can you answer Yes to all 4 Questions?

1. The Homes' Market Value Has Dropped. Hard comparable sales must substantiate that the home is worth less than the unpaid balance.

2. The mortgage is in or near default status.

3. The seller has fallen on hard times. The seller must submit a letter of hardship that explains why the seller cannot pay the difference due upon sale, including why the seller has or will stop making the payments.

4. The seller has no assets. The lender will want to see a financial statement and recent tax returns.


1. The lender will want to see your entire financial picture.

2. The bank may want you to sign a promissory note for the deficiency between the amount owed and the amount your home is sold for.

3. As the seller, you cannot receive any proceeds from the sale. None. Period. Your Realtor and title company may have to work for reduced fees.

4. The banks are overwhelmed with short sales and many times a decision can take up to 60 days or longer.

5. The property may be foreclosed on during the short sale process. Be sure to use an experienced short sale company who should be able to get the foreclosure postponed.

6. Do not expect to receive information on a regular basis, as there may be weeks that go by without news from your lender.

7. The bank will want to get a BPO (Broker Price Opinion) and/or an appraisal of your house.

8. Be patient. This is the best policy. Try to avoid being stressed out over something that you are not able to control.
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Bob Movin-On, , Hartford, CT
Tue Jan 4, 2011
Your foreclosure plan is not advisable, unless you do the second deal in a trust or LLC.
Be advised even doing a short sale will limit your ability to obtain a new mortgage for 3 to 7 years so you may want to purchase the single family home first and again do it in a trust or LLC.

Good Luck
Buy a home after foreclosure, short sale or deed-in-lieu-of
Movin-On LLC
Helping families/people that have lost their homes get back into a new one in as little as 6 months
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Sedat Celik, Agent, Fort Lauderdale, FL
Mon Jan 3, 2011
The best thing to do is the SHORT sale. After you sell your house in SHORT sale you may not be able find mortgage since your credit will be damaged.

Let me know if I can assist you in your SHORT sale since I have done many.


Sedat Celik, Realtor

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Darren Nels…, Agent, Fort Lauderdale, FL
Mon Jan 3, 2011
I can help you with your short sale. Please contact me @ 954-881-8800 and I will be happy to meet you at your convenience.
Darren Nelson
Short sale specialist
Coral Shores Realty
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Alma Kee, Agent, Tampa, FL
Sun Jan 2, 2011
Also here's an Asset Protection attorney you may want to contact:
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Alma Kee, Agent, Tampa, FL
Sun Jan 2, 2011
Be very careful about "moving out" before doing a short sale. If a property is NOT your primary residence and you are forgiven debt via a short sale you can end up with a substantial tax liability. Sellers who do a short sale on a primary residence may be able to qualify for a full exemption from taxes. If the lender forgives you any debt they report it to the IRS via form 1099. Be very careful who you get your advice from... best to pay the money to a competent attorney and CPA... I'm neither so please make sure to verify my info.
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Amy Givoni, Agent, Boca Raton, FL
Sun Jan 2, 2011
Yes, I'm pretty sure your lender would accept a short sale. It's always better for them than an expensive foreclosure. In addition to the real estate company, we have a short sale negotiation company, as well. So, if it's not short, I can help you sell it. If it is short, we can still help you sell it. Please call us directly to discuss your specific situation. We would be happy to discuss your options with you. If you can still qualify for a new mortgage, I would probably advise you to buy, move out, then short sale your townhouse.

Please call with any questions. We look forward to hearing from you.

Amy Givoni, Broker
Givoni Realty Corp.

Short Sale Department, LLC
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Dallas Texas, Agent, Dallas, TN
Sun Jan 2, 2011
Need to contact lender about short sale IF YOU owe more than what property is worth.

Have you consider leasing the townhome?

I would potential consider applying for a new loan keep your current loan paid on time, close on new property, IF you were to "give back the townhome" NOW foreclosure will tank your credit scores you won't be able to apply for a loan for 2 years.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
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Mark LeMenag…, Agent, Lake Nona Orlando, FL
Sun Jan 2, 2011
The direct answer to your question is no because then the bank that holds the mortgage on your townhome will come after your house, as well they should.

Doesn't matter what we think about a short sale on your townhouse. What does your lender say? If you don't have a financial hardship, then sorry but you'll be in that townhouse for a while.
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Mark Doring, Agent, Coconut Creek, FL
Sun Jan 2, 2011
If you were eligible for a "obama modification" then you could be eligible for a HAFA shortsale. I have successfully helped quite a few people in your exact circumstance.

Email me at or call me directly at 561-929-0428 and I can review with you what needs to be considered for a new purchase and the selling of your townhome.
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Alma Kee, Agent, Tampa, FL
Sun Jan 2, 2011
Hi Snow,

If you were declined for a HAMP modification, was it because your income is more than 31% of your monthly payment (including HOA and taxes)? If that's the case then you probably do not have a true hardship, sorry to say.

You can contact and she'll see if you can qualify to purchase a single family home while keeping your townhouse. Nowadays you have to be able to qualify for paying for both--even if you plan to rent it out. The rental income normally cannot be included unless you have substantial equity, 25% to 30%... and that's not your situation.

Best wishes,
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Anna M Brocco, Agent, Williston Park, NY
Sun Jan 2, 2011
Before considering considering foreclosing, do protect yourself and any other assets you may have and consult with an attorney who specializes in real estate--he/she can best advise as it relates to your specific situation--then go from there.
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Wendy Smith, Agent, Crystal Beach, FL
Sun Jan 2, 2011
Ah, buy n bail. Lenders are on to that strategy.
a loan modification is not going to help negative equity, why were you turned down? income?
your lender will most likely agree to a short sale or deed in lieu but don't expect a full release - expect to face financial responsibility for the short sale deficiency.
Negative Equity is not considered a viable hardship to any lender. Walking away from a property simply because you no longer want it or are buried is called Strategic Default....frowned on by all lenders. Some are pursuing citing fraud.

Tread lightly with this - you can get out from under all this but be very careful. Watch out for the other F word ....FRAUD.

I'd call Richard Zaretsky in West Palm Beach - he is an attorney, a ton of experience in short sales AND keeping his clients on the right side of the law. Richard is also very active on - check out his blog.

Good luck.
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Mirlan Saad, Agent, Miami, FL
Sun Jan 2, 2011
you should be able to do a short sale it would not matter what mortgage (lender) you have.
there are many answers to your questions i would be happy to discuss your options at no cost or obligation to you.

Both my teammate Mirlan Saad and i are trained and specialize in foreclosures and short sales,
Please contact me directly and we can explain your options.

Jose Castillo, Realtor, CIPS,ePRo
Mirlan Saad, Realtor,CDPE,REO
Coral Shores Realty
954-240-3940 or 305-812-0532
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