Impact of short sale and not paying property taxes

[gritter]

Im contiplating asking for a short sale. I realize that Im so upside down that holding onto the house can only hurt me worse. If i do a short sale, do I have to continue making payments? If I stop paying my property taxes, what is my liability on the taxes? how long will it take for credit to rebound from a short sale?

I want to start saving, and pay off debt, so I can eventually get a new home in 3-5 years.

Thanks

[faith]

Originally Posted by gritter

Im contiplating asking for a short sale. I realize that Im so upside down that holding onto the house can only hurt me worse. If i do a short sale, do I have to continue making payments? If I stop paying my property taxes, what is my liability on the taxes? how long will it take for credit to rebound from a short sale?

I want to start saving, and pay off debt, so I can eventually get a new home in 3-5 years.

Thanks

Gritter,
Welcome to this forum.
It depends on your lender, most lenders require that you put your home in the market it has to be done by a real estate agent and has to be in the market for at least 60-90 days, have missed 3-4 payments. If you have missed paying your property taxes your lender will pay the taxes to prevent the County to foreclose your house.

Please check the link below regarding Short Sale, Moe and some members of the forum has made a thread and posts about Short Sale. It will affect your credit for about 2 years and about 200 points.

Short Sale Outpost - Loan Modification Forum - LoanSafe.org

God bless and take care.

[gritter]

Thanks...issue it that their is no recovering from my house, its upside down big time, and Id like to get away fro it, rent for 2-3 years while saving $ and building credit back up. I make decent $$, after findig a job recently...so Im worried they might turm down a short sale. I need to build equity in an affordable house, but that will never happen in my current house. What are suggestions???

[cdmosaic]

gritter,

You should read through the posts in the Walking Away section. There is a lot of good info there. A lot depends on if your loans are recourse (i.e. refi or Heloc) or non-recourse (i.e. purchase money). From what I've heard lenders are not being very cooperative on short sales, but it can happen. However, you need to be careful as you can make matters worse for yourself in a short sale vs. foreclosure. For example, if you have non-recourse loans and your lender forecloses (non-judicial as most are in CA) then they cannot come after you for the deficiency, but they can in a short sale. Sometimes you can negotiate with the lender to remove that, but I just read that BofA (my 1st lender) changed their policy and are now refusing to remove the deficiency in a short sale. So do the research first.

We stopped paying in September and still have not received the NOD. We have banked the 10 months of payments and are paying off other debts while we live “rent free”. It is almost if the bank has forgotten us, but that will end eventually. Then we will rent and rebuild our credit and in a few years should be able to buy again. There is a lot of great real world experience on this board, check it out.

[faith]

Gritter,
.
In order to be approved of Short sale you have to put your house in the market with a real estate agent for at least 60-90 days, have missed payments for at least 60-90 days, has a buyer that makes an offer to buy your house, give your real estate agent a letter of authoritization to talk to your lender and financial hardship. Please click the link provided below and check the example letters of financial hardship.

Do you have 1st mortgage only or do you have a 2nd mortgage also?



link:
http://www.loansafe.org/forum/loan-modification/135-examples-hardship-letter.html


Some more tips:
1. Write down every idea that pops in your head about why you can't afford your house. Why are you having financial difficulties. Loss of job, medical bills, increased property taxes, child's college education tuition, divorce, credit card debt, etc. Write every possible thought that has any affect on your financial situation or your wanting to get a loan workout. It doesn't matter what you write down. Don't think too much, just write whatever pops in your head. Sit and write until you have at least 5 ideas. If you don't have 5, you're thinking too much. Just write whatever pops in your head.

2. pick the most obvious ones that have the most affect on your financial situation and ability to make payments on the home. Look at the list as if you were Countrywide, or Washington Mutual, or your specific bank. Which hardships would you look at as the most crucial? Once you select 3 or 4 hardships, focus on them and explain exactly why they are affecting your ability to make payments on the loan. (For example: I was laid off on Sept. 27 and as a result, my monthly income has decreased by $2,100.



3. Rule # 1, make your hardship letter less than one page paragraph form. Loan workout department reps look through many letters. They don't want to be reading a novel to find out why you can't afford your mortgage payments.


4) Line 1: At the top of the hardship letter type your bank's name that you are requesting the loan workout from. Line 2: put their address. Line 3: type their phone number and fax number. Skip a space. Line 4: type the date. Line 5: type "RE: Request for Loan Workout - (Your Loan # and Property address). Skip a line and start your letter with: "Dear (Bank's Name) Representative

5) Mention what change took place why you can no longer afford your payments. Keep it brief and simply let them know that some change happened between the time you bought the home and now which has affected your ability to pay your mortgage loan. Ex: "There has been significant changes in in my financial situation since I purchased my home in October 2001

6) 2nd paragraph: State why your area is bad. Ex: "My property is located in ______ town. The taxes have increased, property values have declined, there are 5 foreclosures on my street, etc." List any bad circumstances for your specific location that support your case for a loan wor

7) List any of the following and explain using details and specific numbers as best as you can.
wrong doing by mortgage loan broker, bad adjustable mortgage loan on the property. • hardships (income I depended on is no longer available, increased bills, inability to work due to health or disability, etc. - from your brainstorm list).


8)Final paragraph: Clearly state that you "cannot pay" and need to negotiate a loan workout. You don't have any other options available. Leave your contact info or your agent's contact info if they require further information.

Sign, date, and give to your lender or bank.

[faith]

Gritter,
Here's the link that cdmosaic is talking about.

Do you need help to walk away?

Deed in Lieu of Foreclosure - Do You Need Help to Walk Away? - Loan Modification Forum - LoanSafe.org

[gritter]

Thanks Faith

My issue, is that I make good $$$ now, and they will view that as me being able to afford the house. The reality is, all my house now will ever be for my family is a VERY expensive rental, one that will never allow me to build equity. I have a ton of bills that have piled up from when I was unemployed, and from when the company I worked for went bankrupt. I see them as not wanting to do a short sales based on this, but have to get away from this house in order to start saving for my families future. What are the best options out there that would allow you to get away from the house; not be responsible for the prop taxes, and be able to start building your credit back in order to purchase a house in 3-5 years.

I keep hearing bankruptcy and forcloser are kiises of death to your credit and being able to purchase a house within % years, and that shot sales atre tough to get????

[faith]

Originally Posted by gritter

Thanks Faith

My issue, is that I make good $$$ now, and they will view that as me being able to afford the house. The reality is, all my house now will ever be for my family is a VERY expensive rental, one that will never allow me to build equity. I have a ton of bills that have piled up from when I was unemployed, and from when the company I worked for went bankrupt. I see them as not wanting to do a short sales based on this, but have to get away from this house in order to start saving for my families future. What are the best options out there that would allow you to get away from the house; not be responsible for the prop taxes, and be able to start building your credit back in order to purchase a house in 3-5 years.

I keep hearing bankruptcy and forcloser are kiises of death to your credit and being able to purchase a house within % years, and that short sales are tough to get????

Gritter,
Short Sale is not only a very long process but also is foreclosure and loan modifications. When you give the financial hardship letter to your lender you also need to give them the list of your monthly expenses which includes all your debts, mortgage payments, utilities, insurance, food, gas etc.

Please click the link below regarding tips to walk away.

Deed in Lieu of Foreclosure - Do You Need Help to Walk Away? - Loan Modification Forum - LoanSafe.org

Thanks,

[cahomeowner]

Originally Posted by gritter

Im contiplating asking for a short sale. I realize that Im so upside down that holding onto the house can only hurt me worse. If i do a short sale, do I have to continue making payments? If I stop paying my property taxes, what is my liability on the taxes? how long will it take for credit to rebound from a short sale?

I want to start saving, and pay off debt, so I can eventually get a new home in 3-5 years.

Thanks

I have a couple of short sales that I have been working on for over a year. no payments made. the hoa, property tax will all be paid by the lenders through a short sale.