We are underwater on our home and not behind on payments but our neighborhood is in decline and we want to move. What are our options?

Asked by Mommyof2, Glenolden, PA Tue Feb 7, 2012

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Ron Thomas, Agent, Fresno, CA
Tue Feb 7, 2012
Upside ~ Down

We get a lot of questions about Homeowners being Upside-Down on their house.
I will try to cover the field on this topic:
1.) Just being Upside-Down is not sufficient reason for the Bank to do anything for you:
2.) The Bank did not create the Recession and the bank has it’s own problems.
3.) For some RELIEF, you need a dire Financial Hardship to exist; such as you lost your job, or you had a Medical Catastrophe.
4.) If you want to do a Shortsale, you will have to prove to the Bank that they must help you, now or later. Most Banks will not even talk to you if you are CURRENT; so you will have to go past the Point-of-no-Return before they will do anything.
5.) The first step would be to find a Realtor, well versed in Shortsales, who will help you.
6.) This is not as simple as it sounds; many Agents have “sworn off shortsales” because of what is involved in them.
7.) It will make a very big difference if you have ONE LOAN as opposed to having a SECOND. The chances of succeeding in your Shortsale are greatly reduced by having a SECOND loan.
8.) You will have to sit down and compose a letter to your Lender; telling them exactly why you have a hardship and what you plan to do. It is my experience that you have to do this, personally; your Realtor cannot do it, and your Attorney cannot do it for you. You should be OPEN and HONEST, don’t try to B.S: This is about the only thing in the whole process that is PERSONAL. (If you really want to be PERSONAL, do it on a lined pad in your own LEGIBLE handwriting or printing.)
9.) If successful, you now can say (in the Listing) that your Shortsale is pre-approved by your bank.
10.) Now, you can List the house with your Realtor and the MLS. Your Realtor will do a CMA, (Comparative Market Analysis) to determine the Listing Price. The Bank may order a BPO, (Broker Price Opinion) to determine the Listing Price. In many cases, you will be on your own; the Bank will not communicate with you.
11.) If you get an Offer, you will probably “rubber stamp” it and your Realtor will forward it to the Bank.
12.) There is no set time for the Bank to respond; we have heard of three weeks, and we have heard of a year or more. This is not fair, not reasonable, and in fact, it is rude and ridiculous. But it is a fact; so do not get impatient or upset with your Realtor, it is not their fault and they have no control over it. They will gently try to push it along, calling every week or two; but they understand that the person who has that file on their desk, probably has 100 to 300 other files, (they could accidently take a file and move it to the bottom of the pile; things like that have been know to happen.)
2 votes
Loretta Grah…, Home Owner, Duluth, GA
Wed Aug 28, 2013
no I live in Lithonia ga and DeKalb count is awful with the appereance and the value of the homes
0 votes
Loretta Grah…, Home Owner, Duluth, GA
Wed Aug 28, 2013
we didn't cause the recession either
0 votes
Mommyof2, Home Seller, Glenolden, PA
Wed Feb 8, 2012
Thank you all for responding with some great information!
0 votes
Michael N., Other Pro, Bucks, AL
Tue Feb 7, 2012
Contact Kathy at 215-750-3059. They have a team to help you figure out what is best for you.

Good Luck,

0 votes
Denise Samou…, Agent, Palm Beach Gardens, FL
Tue Feb 7, 2012
Depending on your lender and your situation you may qualify for the HAFA program.

If you can't afford your mortgage payment and it's time for you to transition to more affordable housing, the Home Affordable Foreclosure Alternatives (HAFA) program is designed for you. HAFA provides two options for transitioning out of your mortgage: a short sale or a Deed-in-Lieu (DIL) of foreclosure. In a short sale, the mortgage company lets you sell your house for an amount that falls "short" of the amount you still owe. In a DIL, the mortgage company lets you give the title back, transferring ownership back to them.

In either case, HAFA offers benefits that make the transition as favorable as possible:

•You can get free advice from HUD-approved housing counselors and licensed real estate professionals.
•Unlike conventional short sales, a HAFA short sale completely releases you from your mortgage debt after selling the property. This means you will no longer be responsible for the amount that falls "short" of the amount you still owe. The deficiency is guaranteed to be waived by the servicer.
•In a HAFA short sale, your mortgage company works with you to determine an acceptable sale price.
•HAFA has a less negative effect on your credit score than foreclosure or conventional short sales.
•When you close, HAFA provides $3,000 in relocation assistance.
0 votes
Erica Ramus,…, Agent, Pottsville, PA
Tue Feb 7, 2012
Call an attorney. You need good legal counsel if you are in this situation.
0 votes
Rich Homer, Agent, NAPLES, FL
Tue Feb 7, 2012
Tough spot. I would engage a local Realtor to help with a possible short sale http://www.trulia.com/voices/directory/Glenolden-broker--16146
0 votes
Terry McCarl…, Agent, Cape Coral, FL
Tue Feb 7, 2012
Ron covered things extremely well. If you are underwater and in financial hardship a short sale would be an option for you. If you can afford your home and just want to move the bank won't be open to a short sale.
0 votes
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