Losing my battle

[sleepless in ca]

I have a short sale offer submitted by my agent's negotiator to Chase back in May 2009. I have 2 lenders, my second is with Suntrust. My loan is recourse so I'm not sure what my next steps are. After postponing the auction 3x already (next is on Nov 19), I just realized that Suntrust paid for $7800 mortgage insurance (which I have no knowledge of). Nobody is willing to pay that amount so I guess they're just foreclosing on my condo. I have unsettled HOA dues amounting to about $4,000....I stopped paying mortgage back in Dec. 2008 and stopped paying 2 HOA's January 2009. My negotiator told me that I still have to pay outstanding HOA's before the sale (in the event that it still pushes thru). If the property forecloses, the associations will run after me and have a judgement rendered against me.

My question is if it's legal for these lenders to foreclose even if we have a willing buyer? And is it better for me to just accept defeat and just foreclose on our condo? Is there a bigger chance that the lenders will not pursue deficiency judgment if we foreclose (rather than short sell)? We left our condo in good shape 6 mos. ago, had our agent take care of garage door replacement (since we're our of state already). Our credit score is hideous as it is and there are no plans of owning another property in the US as we are still suffering from my husband's and my job loss in CA. Although I have a temp job (contract ending soon) and my hubby just got a temp job (no benefits) last week, we are in not in any way back on our feet.

I always advised people to keep their hopes high but now, I'm not sure how to advise myself.

Thanks for all the informative postings to Moe et al.

Sleepless

[HopingtoFind]

Originally Posted by sleepless in ca

I have a short sale offer submitted by my agent's negotiator to Chase back in May 2009. I have 2 lenders, my second is with Suntrust. My loan is recourse so I'm not sure what my next steps are. After postponing the auction 3x already (next is on Nov 19), I just realized that Suntrust paid for $7800 mortgage insurance (which I have no knowledge of). Nobody is willing to pay that amount so I guess they're just foreclosing on my condo. I have unsettled HOA dues amounting to about $4,000....I stopped paying mortgage back in Dec. 2008 and stopped paying 2 HOA's January 2009. My negotiator told me that I still have to pay outstanding HOA's before the sale (in the event that it still pushes thru). If the property forecloses, the associations will run after me and have a judgement rendered against me.

My question is if it's legal for these lenders to foreclose even if we have a willing buyer? And is it better for me to just accept defeat and just foreclose on our condo? Is there a bigger chance that the lenders will not pursue deficiency judgment if we foreclose (rather than short sell)? We left our condo in good shape 6 mos. ago, had our agent take care of garage door replacement (since we're our of state already). Our credit score is hideous as it is and there are no plans of owning another property in the US as we are still suffering from my husband's and my job loss in CA. Although I have a temp job (contract ending soon) and my hubby just got a temp job (no benefits) last week, we are in not in any way back on our feet.

I always advised people to keep their hopes high but now, I'm not sure how to advise myself.

Thanks for all the informative postings to Moe et al.

Sleepless

I believe your negotiator is correct about HOA dues. I have often heard from a long time poster here that you're personaly on the hook for HOA dues. So they will come after you even after foreclosure. I would either pay them or try to settle with them.

As far as your other questions.... Yes, it is completely legal for your lender to foreclose even if you have a willing buyer. Short sale is completely voluntary on their part as well as yours.
As far as if lender can pursue deficiency judgement after foreclosure, they probably will not on the 1st... it is one option rule in CA, they can foreclose or pursue judgement, if they use non-judicial foreclosure they cannot come after you for deficiency judgement. 2nd is another story.... they will most likely charge-off and pursue deficiency judgement. Of course you might be able to settle with them after foreclosure, but it is not a gurantee.
I think whether or not one should pursue a short sale or just proceed with foreclosure is a personal decision. If your lender agrees to a short sale and agrees not to pursue deficiency judgement then that might be a way to go.

[sleepless in ca]

Thank you, Hoping for always responding to my thread. We just got short sale approval from Suntrust (2nd) with the following verbage:

Suntrust has accepted the short sale offer for the above referenced property in the amount of $199,000.00 in exchange for releasing the lien securing your Suntrust mortgage loan upon closing the proposed s.s. of referenced property. Suntrust is offering to settle your account upon the terms outlined in this letter......blah blah...Suntrust agrees that it will release the lien on the property securing the balance of your account upon:
1. receipt by ST of this offer letter signed by borrowers....
2. receipt of certified funds of not less than $7800 representing the net proceeds payable to ST at closing
3. receipt of final HUD1 settlement statement, no later ..evidencing that the borrower will receive no proceeds from the sale and
4. ....

My negotiator might negotiate with Chase with regards to this $7800..... or else, the short sale will not happen. Where to get the $7800, that is the question.....and with my HOA dues...that's another problem.

Will keep you posted. Still hoping for a miracle.

thanks,
Sleepless

[HopingtoFind]

Originally Posted by sleepless in ca

Thank you, Hoping for always responding to my thread. We just got short sale approval from Suntrust (2nd) with the following verbage:

Suntrust has accepted the short sale offer for the above referenced property in the amount of $199,000.00 in exchange for releasing the lien securing your Suntrust mortgage loan upon closing the proposed s.s. of referenced property. Suntrust is offering to settle your account upon the terms outlined in this letter......blah blah...Suntrust agrees that it will release the lien on the property securing the balance of your account upon:
1. receipt by ST of this offer letter signed by borrowers....
2. receipt of certified funds of not less than $7800 representing the net proceeds payable to ST at closing
3. receipt of final HUD1 settlement statement, no later ..evidencing that the borrower will receive no proceeds from the sale and
4. ....

My negotiator might negotiate with Chase with regards to this $7800..... or else, the short sale will not happen. Where to get the $7800, that is the question.....and with my HOA dues...that's another problem.

Will keep you posted. Still hoping for a miracle.

thanks,
Sleepless

Glad I could help. Just wanted to make sure that you understand that just because they are releasing lien it doesn't mean that they will not pursue deficiency judgment. Make sure and talk to your negotiator... the letter should clearly state that they are forgiving debt and will not pursue deficiency judgement.

[sleepless in ca]

Thanks, Hoping. It says in the letter that "Upon settlement of the short sale proceeds, the mortgage loan will be reported to the appropriate credit reporting agencies as "Settled in Full for Amount Less than Owed".....There will be no further collection activities associated with any such "forgiven" amount; however, please be aware that Federal tax law requires that SunTrust file a 1099-C if the amount of forgiven debt exceeds $600.00 and you should consult your tax advisor regarding any potential tax consequences.

I think I don't have to worry about the deficiency with my 2nd....I just hope that we can negotiate with my 1st to settle the $7800.

Still praying that the short sale will push thru and that Chase will be cooperative and forgiving and generous....they got bail out money and we distressed homeowners don't have anything.

Sleepless