Are there any other options besides short sale or foreclosure?

Asked by Alleenp, Wesley Chapel, FL Sun Jan 18, 2009

Is it possible to sell a home for less than I owe but just owe the bank the difference? (Make payments on the remaining balance?)

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Get-smart, , Durham, NC
Tue Jan 20, 2009
it really depends on your lender. some lenders will allow a note while others just want to pursue a judgment. lenders are more easy to work with now because of the housing crisis.
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Randy Hooker, Agent, Chandler, AZ
Sun Jan 18, 2009
Hi Alleen!

To my understanding, there are some lenders out there that will indeed do what you've suggested ~ take a note for the balance. But it depends a LOT on the situation, your financial condition, the amount of the note, etc. You see, the lender will be giving up their collateral (the house), so the "loan" would basically be an unsecured note. You really should discuss that idea with the lender that holds your mortgage.

All the best!

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Steve Roesch, Agent, Portland, OR
Sun Jan 18, 2009
There are a couple other ideas that I think are alternatives. # 1 is Deed in Lieu. This is giving the house back to the bank. You get nothing, it hurts your credit, but you don't get hit with the foreclosure.

The other alternative is Loan Modification. Have the bank alter the rate to give you an affordable payment. It is time consuming, and not guaranteed but has a happy ending if the bank agrees.

I have seen short sales, take a difference and swap it to some form of credit line. usually they put it on another piece of collateral. But I have only seen it happen on a 2nd note. not on a first mortgage. But you could try it. It doesn't make sense to me personally, though.
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