Short Sale with Hardship - When do we give up trying?

[atc5photos]

I was let go from my job last week. Being the sole provider in the family, we do not have sufficient funds to pay the mortgage payment next month.

Our mortgage was recently sold to Nationstar by Flagstar bank. I have called Nationstar last week to tell them that we cannot make Novembers payment at all.

We have had our house listed for sale for the last three weeks with only one showing.

I have had a couple of job interviews, but they were for positions based in northern california where we are from.

I have talked to a lawyer in the small town in MA where we live and was informed that MA is a recourse state.

I have filed for unemployment benefits to at least keep the lights on and food on the table.

I'm unsure how long we keep trying to sell the house. We are working with a real estate agent that absolutely "gets" the short sale process and has suggested we lower the price.

If we walk, and given MA is a recourse state, I was told that if I can't pay the deficiency, I would have to file bankruptcy. Add that to an already full basket!

House stats:
Bought June 2007
$392k loan
owe $363k

If I end up getting a job in CA, we have to move. Question is, do we leave the place vacant?

If so, do I have landscaping/snow removal done?
Do I pay the town taxes?
Do I pay home insurance (what if the place burned down)?


To compound all of this stuff going down, I just lost my Dad to cancer two months ago...watched him die while holding his hand and I'm not at all done with mourning....I think of where I am today and can't help but think how disappointed he may be with me.

Any insight would be really appreciated.

Al

[windnwaves]

I'm not an expert, but I'm gaining some "experience" now and it sounds to me like you are a perfect candidate for a short sale. You need to submit a short sale packet to the lender and, as soon as you get an offer, submit the offer to the lender. I am also doing a short sale with Nationstar. It took several months, but it was approved a couple of days ago. I'm keeping my fingers crossed that it goes through. See my post just above about the verbiage in the approval from Nationstar.

[windnwaves]

My property is also in a recourse state, so I know how stressful it can be. Keep in mind that you'll get out of the woods one way or another and good credit isn't everything. When it comes right down to it, I asked myself: Do I really *need* perfect credit? Do I really need credit at all? We are taught that credit is like an SAT score, you want that 800. Funny how the scores are so similar to SAT scores. Kind of like high school SATs conditions us for the credit scoring system.

One thing that gives me some comfort is that given the magnitude of the crisis, the lenders don't have the capacity to pursue deficiencies in all cases and the court systems are backed up with foreclosures. I definitely wanted to short sell rather than let it go to foreclosure. My strategy was this: A) try for a loan modification (didn't work out, just got the run around) B) short sell C) foreclosure and BK. (If you have an IRA or 401(k) it is protected in bankruptcy.)

You will get through it. In your situation with your mix of hardships, a short sale sounds like the way to go. It takes the lender so long to approve a short sale, that it makes sense to get your application in the system even though you don't have an offer on the table yet. Your realtor should lower the price every couple of weeks until an offer comes in.

Good luck! There is an other side to these woods we are all walking through. There will come a day when this is behind you and you have moved on to better things.

If you want to prevent a national disaster like this again in the future call your congress representatives and tell them to support HR 1207 and SB 604 -- the audit the Fed bills.

[atc5photos]

windnwaves...thank you kindly for your thoughts and many congrats on the short sale being approved!

This is all very helpful as we figure out how to get through this sticky situation.

[IRAKENJI]

Hi windwaves.. we recently put our house in the market for a short sale but my question to you is.. while going through the short sale process, did you pay your mortgage? The reason I asked is we probably won't pay while the process is ongoing. Thanks.

[windnwaves]

No, I stopped paying when I applied for the short sale. I no longer had the capacity to pay and I felt it would move my application from the lender's back burner to the front burner for approval.