My house is valued $20,000 less than loan value - can I sll short and repay the difference - I need to move

Asked by Matt K, Florissant, MO Mon Jan 19, 2009

now before the value slips more. What are my options? I have 700 credit and need to move asap.


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Polly Floyd, Agent, Wilmington, NC
Mon Jan 19, 2009
First you need to talk to the mortgage co and see if they will accept a short sale(most will), 2nd get a good Real Estate Agent that has worked with short sales. If you sell the house short of the payoff, different Banks handle it different, most of the time you don't have to pay the balance, but you may get a 1099 at the end of the year showing that as income to you. But when you talk to the Bank or Mortgage co, they should be able to tell you how they will handle that. Talk to someone in Loss mitigation Dept.
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Sheila Worley, Agent, Saint Charles, MO
Thu Jan 22, 2009
Matt, What subdivision in Florissant is your home in? I was born and raised in Florissant and am very knowledgable of the market in this area. Have you had a current market analysis performed leading you to believe your home is worth 20,000 less? Are you current with your mortgage? I work with several Banks and have experience with the options available for you. If you would like to contact me, I am happy to answer any and all of your questions.
Wishing You The Best!

Sheila Gerken-Worley
The Best Seller GMAC Real Estate
direct 636-299-1884
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Dale Weir, Agent, Chesterfield, MO
Mon Jan 19, 2009
take a deep breath.

OK, now, if you sell short and can bring the difference to the table, the bank never gets involved. You hire a realtor or sell as a for sale by owner and at closing bring a check to the closing table for the difference, then walk away. If you can't bring a check to the table for the difference, then the bank has to be involved and we have to have "lien holder approval" of the sale of the home. Now you need to have an experienced professional helping you. Sit down with a professional who deals with short sales on a daily basis (like Lou Campbell at 314-229-2929). He knows the ins and outs of the short sale market and can help you. Steps that will need to be taken, include putting your home on the market, finding a buyer, negotiating with the bank to accept the short sale (and with any secondary banks that hold second mortgages or home equity loans against the property). In some cases the bank will make you pay the difference between what is owed and what the property sells for, in other cases, they will forgive the difference. Sometimes you don' t know until closing what they are going to do (so be prepared). If you can pay the difference and you don't have a good reason for not paying the difference (out of a job, medical bills, etc) then you can expect that the bank will want the rest of the money but they may let you pay it off over many years with an unsecured loan. Good luck. I handle some short sales

Be prepared that the time line for short sales depends on the bank and that there are no rules - each bank has their own rules and those are changing constantly. You do not have to be behind in your payments any longer in order to sell as a short sale either (for awhile you did have to be behind), BUT, you do typically have to have a good reason why you can't bring the money to the table before the bank will excuse you from the difference between the owed amount and the amount that the house can be sold for (typically it needs to be a reason that will "make them cry" - not a "because I don't want to" reason)

Now, as to your credit score - if the bank is involved in selling your home as a short sale, your credit score is going to drop. I can't tell you by how much, but it will drop and it will most likely affect your ability to buy a get a mortgage to buy a new home in your new location

I work with short sales as well, so if either Lou or I can help let us know.
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Marilyn Gibs…, Agent, Saint Charles, MO
Mon Jan 19, 2009
You need to speak to a Realtor who has successfully navigated the short sale market and knows how to get the job done. Everything you do from this point needs to be made "subject to Lien Holder Approval". Best of luck to you!
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