| Short Sale Option
Hey All,
Im new here so hopefully I dont break any forum rules on my first post.
My current situation is pretty crappy. Here's the breakdown:
Bought townhome in Eagan MN (Minneapolis Suburb) in 2006 for $170k
Loan: 80/20 80% is an interest Only ARM which will readjust in 2011.
Currently owe $136k on the 1st mortgage w/ US Bank. $28k on 2nd w/ Countrywide/BoA.
Current on all payments on both. Was paying an extra $200/month to the 2nd mortgage but stopped doing that recently.
I bought my house with the intention that I would live in it for a while, 3-5 years, with roommates, do some updates (updated the 3baths and new kitchen appliances, new water softener) and then sell it for profit/break even.
Then all this crap started happening with the economy and it seems like others, my townhome area took a huge hit. There are multiple foreclosures going on right now and the area has just went down the drain. Drugs, disorderly tenants, noise disturbances, etc. On top of that, my association will not allow me to rent out my place due to issues with other renters in other units who were grandfathered in as the association changed their renting policy.
Even with the market the way it is i figure i'd try and sell. After talking to numerous realtors and getting multpile CMA's done, it doesnt look good for me. Taking into consideration all the forelosures and other sales in the area, my place would probably sell for around $90k-120k at the max. I cannot come up with that type of cash to get out of this place so I am stuck between a rock and a hardplace.
So i started looking into short sales and how it would affect me etc. Well currently i am doing ok financially, but I will be getting married soon and my fiance has a tremendous amount of college and grad school debt. I have had some other issues (car issues, knee surgery, etc) but I just dont know if i can prove financial hardship to the extent that some of the banks require.
I cant get any banks to refi my current situation because i dont have enough equity in the place for them to consider it. I also dont qualify for the new Making Homes Affordable programs as i dont have loans through Fannie or Freddie.
The only good news in this deal is that my fiance and i got pre-approved for a good amount and if we were to purchase another home in her name, she would qualify for the $8k credit. With interest rates the way they are its a great time to buy so i started doing some research. My brother inlaw is a CPA and he said that she should qualify as a first time home buyer even if i get pre-qualified with her and even potentially cosign with her.
I have read about people are doing these 'buy and bail' things where they buy a house and then walk away from the other one. Personally it just doesnt seem right, but at the same time you have to look at what is best for yourself financially and personally and this approach may be my last effort.
I talked to my association president and she said that they will still not allow a renter in my case and in all reality i will not be able to sell my house currently so i think that this is my best option.
I know it hurts your credit 80-100 points for short sales, but i currenlty have excellent credit and i feel that i could take a hit there as i can build it back up in the future.
If anyone knows of anything i should do or numbers for the loss mitigation depts for the banks i currently am using that'd be great. Any options, opinions, helpful suggestions, anything, anything i beg, as an option to get out of this place will be great. If there are steps i should take for the short sale process that'd be great. (Who should i talk to? Bank? Realtor? Broker? Lawyer?)
My stepmom is a mortgage broker and she is telling me to contact the banks directly, and not the realtors, and see what i can do but i am also talking to a realtor that is saying that they can help out with the process as well. This realtor is in the area so i somewhat trust that she knows what she's doing but i just want to make sure i shouldnt be doing something else. Who should i be trusting in this situation?
Also, should my fiance and I buy a home here soon, do i continue to make payments on my townhome while in the short sale process or not? I cant imagine they'd agree to a short sale if they have a performing loan, but i also read that they may take this into consideration as i am trying to do everything possible to make ends meet.
I appoligize for the size of this email and appreciate any/all the help i can get from this great forum.
Thanks in advance,
Ducksoup18
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