Denon707, Home Seller in 03038

My husband had to take a cut in pay and we are having another baby. We really no longer can afford our home without using credit cards. We are upside

Asked by Denon707, 03038 Tue Feb 16, 2010

down in our home and the market is bad in Derry. We are not behind in any payments but I just dont know how much longer we can continue. We are living beyond our means! Should we try a short order sale? a home modification? We would love to get out of Derry b/c my husband's new job is 60 miles south. I put a lot of money down on my house and really feel badly about losing it, but I am also thinking we just made a bad gamble and we have to deal. Help?!?

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Carolyn & Ja…, , 03032
Fri Mar 12, 2010
In general, I would ignore any advice a realtor or broker give you. Both the advice and individual is almost always self serving. But the financial advice from Mark is appropriate. NEVER swing into Dunkin Donuts, and do not buy any drinks out. Two dollar items from McDonalds is the limit. Stop eating in restaurants. You do not "deserve it". Shop at Market Basket, look over your car insurance. Get a part time job. Ten dollars a week is 500 a year.
1 vote
Mark Overhol…, Agent, Clovis, CA
Sat Mar 6, 2010
Before you even consider doing something like a short sale, I think your first step is to really take a look at what your spending. Is there anyplace you can cut back so that you don't need to do something as drastic as a short sale? What about cable tv, cell phones vs house phone, buying generic vs name brand, all of these things add up. If you take a look around at what you truly need vs what is a luxury you might be able to trim some expense fat.
Only after seriously looking at your finances should you begin to do something as financially destructive as short selling your home.
Good Luck!
1 vote
Short Sale M…, Other Pro, MA,
Sat Mar 6, 2010
You've gotten excellent advice here. I think a short sale is the best option.
I purchase short sale properties and have a lawyer that will specifically negotiate with your lender on YOUR behalf. Don't keep using credit cards. Try to save your money at this point.

Having a buyer is the quickest way to get the financial monkey of your house off your back.
1 vote
Dane Hahn, , 34223
Tue Feb 16, 2010
Hi Denon,

I know it won't make you feel much better, but you are not alone--about 10% of the homes in the US are in the same situation you are. One difference, you put money down on your purchase, and during the last 4 or 5 years, not too many people did.

A short sale is a transaction in which the asking price is lower than the amount still owed on the mortgage, and where the bank agrees to accept the lesser amount to avoid a foreclosure. It usually occurs when the seller either chooses not to make payments on a house that has lost much of it's “market” value or can no longer make the mortgage payments due to a life change such as a job loss, a divorce, unforeseen medical bills or an adjustable rate mortgage resetting itself at a higher interest rate.

But while the bank may accept the lesser amount, to make the transaction happen, there is usually more to the transaction that that. The bank may forgive the difference owed—or require the seller to sign a note for the difference—depending on the seller's other assets. In any case a short sale will doubtless cause a major dip in the seller's credit scores.

As you can imagine, with all the approvals needed these transactions usually take much longer than anyone expects. When you look at them this way, they shouldn't call them short sales. Traditional transactions can speed through the system in a matter of only a few weeks. But short sales seem to last forever.

The federal government in the form of the U.S. Treasury has proposed a new set of rules that will speed up the system for the buyer and give the lenders a bonus to make the transaction happen quickly.

You, the seller must qualify and be eligible for the Obama Administration's program for struggling homeowners—whose mortgage payments are greater than 31% of their gross income. But even if you do not qualify, the bank may request a short sale under the new guidelines for loans made prior to January 1st—and for less than $729,750.

The bonus for everyone is the lender will have only 10 business days to deny a short sale request—rather than the months and months they sometimes take now. If it is accepted, you may be relieved of your remaining debt, and may even be eligible for $1,500 to be used toward moving. In this plan the lender will get a $1,000 bonus and the 2nd mortgage holder may get up to $3,000 from the proceeds.

All this is a design to make the short sales work faster and more smoothly. These guidelines are designed for the everyday buyers and sellers and are not designed to assist investors. The additional regs that are a part of the guidelines specify these transactions must be “arm's length” meaning borrowers cannot list with or sell to a close friend, family member or business associate(and at the same time close out their debt).

The Government retains the right to treat the forgiven debt as income, and the IRS will no doubt look into these transactions, but during 2010 they may allow this “windfall” to be overlooked, especially if good records were kept and the amount in question is less than the down payment and repairs on a principal residence. Seek competent advice from a tax professional.

And finally, buyers of short sale homes may not resell them within 90 days of the closing—again this applies to investors who might buy and sell a house the same day.

Hope this helps,

Dane Hahn
Broker in NH & Florida
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1 vote
Debbie Colly…, Agent, Derry, NH
Sat Jan 28, 2012
Hi there, there are options out there that may work for you.
I have experience in short sales, selling, rentals.
Everybodys situation is a little different.
You could give me a call and I would love to help you out.
Debbie Collyns 603 264 4131
Summerview RE
Derry NH
0 votes
qazpl999, Home Buyer, Derry, NH
Sun Jan 22, 2012
If you have a lot of other debt and are way upside down talk to a good bankruptcy lawyer a lot of them suck so choose wisely
0 votes
Val Cloutier, Agent, Londonderry, NH
Wed Feb 17, 2010
Dane, I had to give you a thumbs up for that answer-there were things you mentioned that I wasn't aware of. Thanks for sharing!
0 votes
Scott Godzyk, Agent, Manchester, NH
Tue Feb 16, 2010
Denon Your first call should be to your lender, ask for the home retention department, let them know your situation and what your hardship is. If you would like to stay in your house, they should be able to assist with you a loan modification. There are several types now, one of which is to lower your monthly payments so you do not get behiind. Now you do not have to pay anyoine for loan modification assistance, you can do it yourself. They will ask you for your last 2 years tax returns, last 2 paystubs, 3 months bank statements and then to write a letter explaining your hardship. No if they can assist you or if you feel you want to sell, i can certainly assist you with a shortsale. Your first step in the short sale is to call me to set up an appointment where i can complete a broker price opinion on your home and see what it is worth in todays market compared to what you owe. I have a negotiator i work with that will work on your behalf, it is no cost to you. Please email me direct at or contact me through the link on page. No matter what you decide, i hope things work out for your.
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0 votes
Val Cloutier, Agent, Londonderry, NH
Tue Feb 16, 2010
Hi Denon.
The first thing you need to do is call your lender and explain what is going on. PLEASE try not to use your credit cards to stay afloat. Pay your utility and credit card bills on time. Be aware that some (but not all) lenders won't even consider a short sale or loan modification if you are current with your payments. By letting bills other than the mortgage go unpaid (or paid late) you will destroy the rest of your credit, which looks really bad when you are trying to find a rental. So many people make the mistake of trying to hold on to the house, and in the end, they have a hard time finding a suitable rental that will overlook the inevitable poor credit.

It sounds like things are pointing you out of Derry, which is unfortunate but a likely reality. I know if sounds like putting the cart before the horse, but have you started to look at housing in the areas closer to your husband's job? Getting a jump start on that will give your family some stability and allow you to focus on working with the lender. Get a copy of your current credit report, so that when you're looking for a rental you won't have 'pings' on your credit (further dropping your score) every time it's run.

Please know that you're not alone in this-so many folks are in the same situation as you right now, and in many cases it's through no fault of their own. We hear about the economy on the nightly news, but it becomes all too real when it affects your life. Please let me know if I can help by running a market analysis for you, or being of assistance in any way. I'm right next door in Londonderry.
Thanks and take care

Valerie Cloutier, Realtor®
MA & NH Real Estate Services
Accredited Buyer Representative
e-PRO Certified, Notary Public

C: 603-965-5197
O: 800-746-8448 x424 Toll Free

Innovative Realty
Londonderry NH 03053
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0 votes
Kathy Weber, Agent, Temecula, CA
Tue Feb 16, 2010

Definitely like stated below, contact your lender first. Ask if they have any type of assistance programs, loan modification's, or a Short Sale (loss mititgation department) you can speak too.

Whatever they recommend or are willing to work with you on, you still need to seek advice from your CPA. Find out the tax implications from going through any type of Short Fall.

Next, I would work with a Realtor. Not only to list the property, but to get some help with filling out the correct Short Sale package that most lender's require. It's quite a lengthy process and needs to be put together properly before submitting to the lender.

Besty of luck!
0 votes
Bill Burke, Agent, Bedford, NH
Tue Feb 16, 2010
Hi Denon707,

If you are upside down and need to get out then a Short Sale may be an option. Before determining anything, you will want a market analysis done on your home to determine what it could be listed for and then figure out what you owe and talk with your lien holder (Mortgage Company). I would be happy to talk with you and take a look at your home and do a complinentary Market Analysis for you guys on your home and start there is you want. I am familiar with Derry. If you would like some help or would like me to at least meet with you and take a look at your home, please feel free to contact me.

Bill Burke
Keller Williams Realty
Office: (603) 232-8282 Ext. 2621
0 votes
Delia Peters…, , Jenkintown, PA
Tue Feb 16, 2010
Get on the phone immediately with you mortgage company and see what help they can offer. Have to speak directly with them to best consider all your options.
0 votes
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