Which scenario is better for shortsale? Please advise - Loan Modification Forum

Crystal09 · 09-30-2009, 11:48 AM

We currently own an upside down home (WA state) with an ARM on our first mortgage (Chase) and a fixed rate of 9%+ on the second (GMAC). We’ve applied for a loan mod, asked the lenders to just put us at a fixed/lower rate and we were denied on everything; and our home is backed by a private investor. We basically live from paycheck to paycheck. My husband is in the middle of buying a rental property on his own, 20% down with the help of our family. This property is actually for his sister who can’t get a loan and he’s taking on this burden; she’ll be making monthly rent.

There will be a layoff at 1 of my jobs (sometime in first quarter of 2010 and I have 2 jobs total) and I’m debating if I should volunteer since it might make our case stronger if I do get laid off. We've come up with 2 scenarios that could possibly help with our case. I'd appreciate any input/guidance that you all provide.

Scenario A: Once my husband closes the rental property paperwork, we plan to miss a couple payments to see if the lenders are willing to help us this time. If not, I plan to hire an attorney to help me with the short sale. By then I’d volunteer to get laid off from 1 of my jobs, and probably be at least 3 months behind my mortgage payments. I've heard that the attorney can help eliminate the deficiency balance if I take the short sale route. Will the banks go after my husband’s new rental property?

If we try for load mod again after I get laid off, and since our home is underwater, do you think an attorney can get the bank to forgive the difference (balance owed vs current home value)?

Scenario B: We'd put our underwater home up for rental and we'd buy another property as a primary residence (somewhere closer to my family since we're far from them right now) with the help of my brother, he'll co-sign the loan for us. If I was to get laid off and no one is renting our old home anymore which will cause me to miss the mortgage payments, will we get a faster response on the short sale (vs. Scenario A)? Will the banks go after both of our new properties?

I’ve been trying to work with my lenders and have been tossed around so many times and wasted a lot of time/energy for nothing. I’ve come to the point that I just want to give up and if they decide to help me then, great, if not I’m shooting for short sale.

A big thanks to this forum and everyone here, I’ve been lurking for months now and have found a lot of valuable information … well here I am =)

inmyview · 09-30-2009, 12:44 PM

Not sure about the laws in washington but I'm guessing that you need to get your husbands property closed before missing a payment on your principle home. The more I read the more I am hearing that the lenders really dont take you seriously until you are late. What I have done is skip one payment and then continue regular payments so it show up no as 3 instances of 30 days late instead of missing 3 continuous payments and getting additional late fees. Once I stopped paying and then found this site things started moving.
I have heard some positive info somewhere on GMAC - chase - good luck.
My lender is wells fargo.

From what I have seen locally you can probably miss several payment before you get a NOD that starts the 120 day clock and most times you can short sale during that period and the bank will hold off on the auction sale

Crystal09 · 09-30-2009, 04:39 PM

I've talked to a couple nice guys at Chase and they even gave me their direct numbers, but when I call them to follow up on my case or to get additional information, they never return my calls.

I will have to make sure the new property closes before we do anything. It's just so frustrating that the lenders pretend like they want to help us but they really don't .... I'm running out of options.

Thanks inmyview

TrappedFL · 10-01-2009, 03:47 PM

I would talk to an attorney now (the initial consult should be free, if not then don't see him or her). They can advise if you're at risk for a deficiency note or judgment based on your state laws. I have already talked to attorneys about my situation, which is somewhat similar.

If it is likely that the lender will not approve the SS or will require a huge note for the deficiency, then I would seriously consider volunteering for the layoff because that will only strengthen your case.

09-30-2009, 11:48 AM	#1 (permalink)
Crystal09 Junior Member Join Date: Sep 2009 Location: WA Posts: 3 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Which scenario is better for shortsale? Please advise We currently own an upside down home (WA state) with an ARM on our first mortgage (Chase) and a fixed rate of 9%+ on the second (GMAC). We’ve applied for a loan mod, asked the lenders to just put us at a fixed/lower rate and we were denied on everything; and our home is backed by a private investor. We basically live from paycheck to paycheck. My husband is in the middle of buying a rental property on his own, 20% down with the help of our family. This property is actually for his sister who can’t get a loan and he’s taking on this burden; she’ll be making monthly rent. There will be a layoff at 1 of my jobs (sometime in first quarter of 2010 and I have 2 jobs total) and I’m debating if I should volunteer since it might make our case stronger if I do get laid off. We've come up with 2 scenarios that could possibly help with our case. I'd appreciate any input/guidance that you all provide. Scenario A: Once my husband closes the rental property paperwork, we plan to miss a couple payments to see if the lenders are willing to help us this time. If not, I plan to hire an attorney to help me with the short sale. By then I’d volunteer to get laid off from 1 of my jobs, and probably be at least 3 months behind my mortgage payments. I've heard that the attorney can help eliminate the deficiency balance if I take the short sale route. Will the banks go after my husband’s new rental property? If we try for load mod again after I get laid off, and since our home is underwater, do you think an attorney can get the bank to forgive the difference (balance owed vs current home value)? Scenario B: We'd put our underwater home up for rental and we'd buy another property as a primary residence (somewhere closer to my family since we're far from them right now) with the help of my brother, he'll co-sign the loan for us. If I was to get laid off and no one is renting our old home anymore which will cause me to miss the mortgage payments, will we get a faster response on the short sale (vs. Scenario A)? Will the banks go after both of our new properties? I’ve been trying to work with my lenders and have been tossed around so many times and wasted a lot of time/energy for nothing. I’ve come to the point that I just want to give up and if they decide to help me then, great, if not I’m shooting for short sale. A big thanks to this forum and everyone here, I’ve been lurking for months now and have found a lot of valuable information … well here I am =)

09-30-2009, 12:44 PM	#2 (permalink)
inmyview Senior Member Join Date: Sep 2009 Location: Petaluma, ca Posts: 55 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Which scenario is better for shortsale? Please advise Not sure about the laws in washington but I'm guessing that you need to get your husbands property closed before missing a payment on your principle home. The more I read the more I am hearing that the lenders really dont take you seriously until you are late. What I have done is skip one payment and then continue regular payments so it show up no as 3 instances of 30 days late instead of missing 3 continuous payments and getting additional late fees. Once I stopped paying and then found this site things started moving. I have heard some positive info somewhere on GMAC - chase - good luck. My lender is wells fargo. From what I have seen locally you can probably miss several payment before you get a NOD that starts the 120 day clock and most times you can short sale during that period and the bank will hold off on the auction sale

09-30-2009, 04:39 PM	#3 (permalink)
Crystal09 Junior Member Join Date: Sep 2009 Location: WA Posts: 3 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Which scenario is better for shortsale? Please advise I've talked to a couple nice guys at Chase and they even gave me their direct numbers, but when I call them to follow up on my case or to get additional information, they never return my calls. I will have to make sure the new property closes before we do anything. It's just so frustrating that the lenders pretend like they want to help us but they really don't .... I'm running out of options. Thanks inmyview

10-01-2009, 03:47 PM	#4 (permalink)
TrappedFL Member Join Date: Jul 2009 Posts: 20 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: Which scenario is better for shortsale? Please advise I would talk to an attorney now (the initial consult should be free, if not then don't see him or her). They can advise if you're at risk for a deficiency note or judgment based on your state laws. I have already talked to attorneys about my situation, which is somewhat similar. If it is likely that the lender will not approve the SS or will require a huge note for the deficiency, then I would seriously consider volunteering for the layoff because that will only strengthen your case.

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