whats the point of a short sale? If you have 7000 left in your checking account the bank will want to bleed you dry. Why not just let it go.?

Asked by Dobie, Elk River, MN Wed Jul 27, 2011

your credit suffers either way.

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8
Gerard Carney, Agent, Spring Hill, FL
Wed Jul 27, 2011
Pssst! take it out now, shove it in you wallet, and stand around with your hands in your pocket, look up at the sky a whistle like you know nothing!
1 vote
Jacalyn Blank, , San Diego, CA
Wed Jul 27, 2011
Right now with conventional financing, you won't requalify for another mortgage for 7 years if you go through a foreclosure. A short sale is 2 years for gov financing such as FHA or VA, but often even less than 2 years if you're going going with conventional financing.

I don't know about the specific laws of your state, but I do know that there are specific guidelines in each state for what loans are recourse and which are non-recourse. If you have a recourse loan, your lender can sue you after the foreclosure. Some states are currently offering a cancellation of debt income relief as well, when you go through a short sale- where as with a foreclosure you may receive a 1099 for your loan amount to be claimed as INCOME on your next year's tax return (again this varies state by state and loan by loan, so make sure you do your research).


As a last point, a short sale can often POSTPONE a foreclosure sale date meaning you will get to remain living in your house, without paying anything for it, for LONGER.


Take the $7000 in your checking accout, put it under your mattress, and move forward with the short sale!
0 votes
Cameron Piper, Agent, Forest Lake, MN
Wed Jul 27, 2011
Problem is Dobie you won't know what type of foreclosue the bank will choose until it is already too late. Are you willing to risk the possible judgement coming from a second lien holder or the 1st lien in 5% of the foreclosures (your number) simply to save your $7K in cash (which they won't take all of by the way)?

Cameron Piper
Coldwell Banker Burnet
licensed MN Broker
Web Reference:  http://www.campiper.com
0 votes
Chris Block, , Saint Paul, MN
Wed Jul 27, 2011
Minnesota is a Non-Recourse State and so 1st mortgages are non-recourse loans. The 1st lien holder can not sue you for the deficiency between loan amount and what was bid at the sherrif sale.

2nd liens and so on have different rules and can indeed still pursue you. This is where most of the confusion lies and where most people get into trouble. It almost always will happen to you and the judgement attaches to you personally. Don't take my word for it go ask an attorney if you care to know.

So, in my opinion homeowners with 2nd liens tend to benefit the most from a short sale. This is because usually a good realtor can get a full satisfaction on the 2nd without costing you money.

The credit score, repurchasing a home, etc... comes down more to lifestyle than anything.

so go for it I am not going to try and sell you on a short sale. That is my specialty but some people could care less about their credit or repurchasing a home. If you only have 1 mortgage be happy you live in Minnesota where there is a lot of protection. I am not going to lie to you and say it is the best option on the planet. Everyone has to decide for themselves what is right for their family.

You can always check out my blog which covers this topic as well. Just click on the link below
0 votes
Dobie, Home Buyer, Elk River, MN
Wed Jul 27, 2011
Cameron, it's my understanding in Minnesota that if the bank chooses to foreclose
via sheriff sale, it's done. 95% of the time the bank won't or can't sue.
0 votes
Eli Givoni-S…, , Boca Raton, FL
Wed Jul 27, 2011
A short sale is far less of a hit to your credit than a foreclosure or a bankruptcy. The bank will likely NOT take your last $7,000, if that's all you have and need money to live. Also, we can address the outstanding debt and try to get you off the hook for the deficiency. Please feel free to give me a call and I can explain it to you.

Eli Givoni, Director
Short Sale Department, LLC
561-361-1909
info@shortsaledept.com
http://www.shortsaledepartment.com
Serving all 50 states

MARS Disclosure for General Commercial Communications
IMPORTANT NOTICE:
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
0 votes
Cameron Piper, Agent, Forest Lake, MN
Wed Jul 27, 2011
Dobie,

Because the bank could sue you for the deficiency. Why not pay off some credit cards or school loans with that money and then when you are truely broke and can't afford the payment (which is the reason the bank would approve a short sale) sell the house on a short.

A Deed-In-Lieu is an awful idea with the way MN laws are written. I wish agents from other states would stop recommending them to people.


Cameron Piper
Coldwell Banker Burnet
licensed MN Broker
Web Reference:  http://www.campiper.com
0 votes
Ron Thomas, Agent, Fresno, CA
Wed Jul 27, 2011
The reasons FOR:
1. It hurts your Credit Score less.
2. You can probably buy again sooner
3. By definition, you will probably have free rent for 6-12 months
4. You will have at least a little control

The reasons AGAINST:
1. Get it over quickly
2. A Deed-in-lieu is just about equal
3. You will have at least a little control
4. You can move-on

You can decide.
0 votes
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