Loan Modification Forum - LoanSafe.org - View Single Post - Should I keep paying? Want to do a short sale.

JesseTNC · 06-03-2009, 05:29 PM

Disclaimer: IANAL but I am in a similar situation - SoCal home, under water by ~50% of the original value (and we never planned on living here more than about 5 years anyway).

After much deliberation back in April my husband and I decided the best decision would be to just walk away from our mortgage. We're currently about 2 months behind on payments. While we're waiting for the bank to foreclose, we're paying off our other debts with the money that would otherwise have been flushed down the drain on the mortgage.

We visited an attorney who recommended a short sale, but since we don't intend to buy again for awhile we're just letting the bank foreclose. (Actually, what the attorney suggested we do was "buy and bail" which seemed like pretty sketchy advice... but that's beside the point.) Some decent advice the attorney DID give us if we decided to go the short sale route was to find a real estate agent who specializes in short sales... in other words, that's ALL they do, and they'd pretty much handle all the details. He said the question to ask when hunting for one is "how many short sales have you handled from start to finish this year" or something to that effect.

Anyway, after some research our basic conclusion was that the major difference between a short sale and a foreclosure is the length of time the blackmark stays on your credit -- foreclosures take longer to go away, but in the interrim your credit is equally screwed regardless, and I don't think it matters whether or not you kept current on your payments prior to the short sale (as a matter of fact, I think one of the criteria is you have to be X months behind on payments, but you'd have to verify that).

Plus, to facilitate a foreclosure all we have to do is, well, nothing. As opposed to a short sale which it seems would take some action on our part. We're excited about the prospect of being renters again. Not having to worry about every little thing that breaks will be such a relief, youknow?

06-03-2009, 05:29 PM	#9 (permalink)
JesseTNC Member Join Date: Apr 2009 Location: Lake Forest, CA Posts: 14 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Should I keep paying? Want to do a short sale. Disclaimer: IANAL but I am in a similar situation - SoCal home, under water by ~50% of the original value (and we never planned on living here more than about 5 years anyway). After much deliberation back in April my husband and I decided the best decision would be to just walk away from our mortgage. We're currently about 2 months behind on payments. While we're waiting for the bank to foreclose, we're paying off our other debts with the money that would otherwise have been flushed down the drain on the mortgage. We visited an attorney who recommended a short sale, but since we don't intend to buy again for awhile we're just letting the bank foreclose. (Actually, what the attorney suggested we do was "buy and bail" which seemed like pretty sketchy advice... but that's beside the point.) Some decent advice the attorney DID give us if we decided to go the short sale route was to find a real estate agent who specializes in short sales... in other words, that's ALL they do, and they'd pretty much handle all the details. He said the question to ask when hunting for one is "how many short sales have you handled from start to finish this year" or something to that effect. Anyway, after some research our basic conclusion was that the major difference between a short sale and a foreclosure is the length of time the blackmark stays on your credit -- foreclosures take longer to go away, but in the interrim your credit is equally screwed regardless, and I don't think it matters whether or not you kept current on your payments prior to the short sale (as a matter of fact, I think one of the criteria is you have to be X months behind on payments, but you'd have to verify that). Plus, to facilitate a foreclosure all we have to do is, well, nothing. As opposed to a short sale which it seems would take some action on our part. We're excited about the prospect of being renters again. Not having to worry about every little thing that breaks will be such a relief, youknow?