Negotiating Deficiency is Key in a Short Sale

[DRJD1220]

I purchased a 4 unit building in 2005 for $475K.I refinanced with CW in 2007 with a 10 year level payment loan(I can pay from 3 options,but I pay the minimum) The bal is $456K.I want to negotiate a short sale,& when the Realtor checked, there are so many forclosures in San Bernardino, and at leat 8-10 on my street, that he said the comps were in the $100,000 range!!.I', underwater by $350K! Now there are 2 vacancies and I cannot continue to carry the $3150 p/mo. note any longer.I am not behind or late yet,but its coming. Do I have a rats chance...to even get their attention to consider a short sale? I have a home,and I pay that too.I cannot let the roof over my head go delinquent.Will I be required to spend down every dime I have before a short Sale is considered? If I have other assets, like Life Insurance & Retirement(I'm 56 yrs old) will I have to liquidate those too before I am considered Broke? Is it better to send them half the payment from the rents I receive or let it go delinquent? I feel like there is no real solution for someone in my situation.Please respond.

[lewdog]

I am new to this forum, and want to start by saying thanks to all those who have shared their experiences, it has been very helpful. I currently owe approximately 525K on my home, and it is worth no more than 275K. A loan mod doesn't seem feasible, at least with terms I can afford. I have been strongly contemplating short selling. My lender is AHMSI. I've seen Jeanne Drake and Jim Davis' names as good contacts, whether you are short selling or looking for a loan mod. I've also read on the forum that it is smart to have an attorney be the one to contact them. Does anyone have the name of a good attorney that has seen good/timely results with AHMSI? Or any other info. that would be helpful in starting the short sale process with AHMSI? Thanks.

Lewdog

[snapple candy]

DRJD,
Many on the blogs have liquidated all of their assets including retirement accounts and maxed out their credit cards in an attempt to keep up with their mortgage payments. Many regret it because it is like pouring money down a black hole. Half-payments would be doing the same if you see the writing on the wall. With this much underwater, I am not so sure short sale will be acceptable to your lender and I have heard they take months to get approved and the potential buyers walk. I would find a good real estate attorney....we are not allowed to recommend attorneys on these blogs. You can go to attorney thread to ask some general questions though. I personally contacted a few mortgage brokers to find out who the good real estate attorneys were. Have you thought about seeing a bankruptcy attorney? Even just to explore all your options?

[cahomeowner]

Originally Posted by lewdog

I am new to this forum, and want to start by saying thanks to all those who have shared their experiences, it has been very helpful. I currently owe approximately 525K on my home, and it is worth no more than 275K. A loan mod doesn't seem feasible, at least with terms I can afford. I have been strongly contemplating short selling. My lender is AHMSI. I've seen Jeanne Drake and Jim Davis' names as good contacts, whether you are short selling or looking for a loan mod. I've also read on the forum that it is smart to have an attorney be the one to contact them. Does anyone have the name of a good attorney that has seen good/timely results with AHMSI? Or any other info. that would be helpful in starting the short sale process with AHMSI? Thanks.

Lewdog

do you have a fannie mae or freddie mac loan? what the balances of your 1st and 2nd? are you prepared to walk away?

[oc949]

Can anyone suggest the most effective way to get B of A to waive their right to pursue deficiency after the short sale approval has been issued, but not yet signed by me?
I live in an anti-deficiency state (California) and received a short sale approval from B of A with the clause saying they can pursue the deficiency. And I know that they, or a collections company, can do this. You are only protected from this on a foreclosure and with a non-recourse loan. There is a myth that you are also protected in a short sale but you are not.
I am trying to get B of A to drop their clause and to waive their right to pursue a deficiency, but it is slow going trying to find someone empowered to do this.
Has anyone here done this successfully? Please provide me your suggestions for how to do so.
Thank you.

[emc0317]

oc949,

Do not sign the paper, renegotiate and or avail a lawyer if I were you. I'm also waiting for shortsale approval and in CA. Can afford a foreclosure? Good Luck!

[oc949]

I am trying to renegotiate, the question is with who? Do I work through my negotiator, or do I try to involve upper management? I have heard unconfirmed reports that the negotiators cannot alter the approval letter and that you need to go higher up.

Please, anyone who has been through this process, let me know how you approached it. I have only a matter of days to resolve the issue because B of A has given a very tight deadline to wrap the short sale up, or they will pull the offer.

Thank you in advance

[emc0317]

Originally Posted by oc949

I am trying to renegotiate, the question is with who? Do I work through my negotiator, or do I try to involve upper management? I have heard unconfirmed reports that the negotiators cannot alter the approval letter and that you need to go higher up.

Please, anyone who has been through this process, let me know how you approached it. I have only a matter of days to resolve the issue because B of A has given a very tight deadline to wrap the short sale up, or they will pull the offer.

Thank you in advance

oc949,

Your realtor supposed to be your negotiator they should talk to shortsale underwriter that approve everything, if they dont agree, that's the problem. You have to have at least multiple back up plans.

[Becky123]

I purchased an investment property in Lehigh Acres, Fort Myers, FL in August 2006. The purchase price was $225K. Mortgage is with Century Bank, FL
My primary home is 150 miles away from this property. Unfortunately for the last 1.5 years I am unable to rent this home or the renters had to be evicted because they do not want to pay the rent. Due to a lot of reasons with my parents health I am unable to keep this property.
Now I want to see if I can sell the home with a short sale. I have got a buyer for $60,000 only ( thats how much the house appraised for). I sent the short sale documents to the bank in April 2009. My short sale was immediately approved but the bank asked me to the pay the deficiency amount which is coming up to $160,000. They have asked me to take a second mortgage on my primary home and pay the remaining amount.
Obviously this is not agreeable to me as I would be paying for a property I do not even own!

Timeline:
April 2009: Started Short sale proceedings and stopped paying mortgage on the property
Aug 2009: Bank appointed a loss mitigation team to look into my case

I am still negotiating with the bank to reduce the deficiency amount but they do not want to budge even for a dollar! I do have a good job and make decent money which probably has made the bank very merciless.

What are my options?
Thanks in advance!

[cahomeowner]

Originally Posted by Becky123

I purchased an investment property in Lehigh Acres, Fort Myers, FL in August 2006. The purchase price was $225K. Mortgage is with Century Bank, FL
My primary home is 150 miles away from this property. Unfortunately for the last 1.5 years I am unable to rent this home or the renters had to be evicted because they do not want to pay the rent. Due to a lot of reasons with my parents health I am unable to keep this property.
Now I want to see if I can sell the home with a short sale. I have got a buyer for $60,000 only ( thats how much the house appraised for). I sent the short sale documents to the bank in April 2009. My short sale was immediately approved but the bank asked me to the pay the deficiency amount which is coming up to $160,000. They have asked me to take a second mortgage on my primary home and pay the remaining amount.
Obviously this is not agreeable to me as I would be paying for a property I do not even own!

Timeline:
April 2009: Started Short sale proceedings and stopped paying mortgage on the property
Aug 2009: Bank appointed a loss mitigation team to look into my case

I am still negotiating with the bank to reduce the deficiency amount but they do not want to budge even for a dollar! I do have a good job and make decent money which probably has made the bank very merciless.

What are my options?
Thanks in advance!

typically the banks are going to do 1 of 2 things in a short sale:

1. they will issue a 1099 for the deficit
2. they will pursue a deficiency judgment

it will be 1 or the other but not both. you need to consult with a short sale specialist in your area who can negotiate on your behalf. you must have some assets perhaps equity in your primary which is why the banks are asking for the money.

don't try to do this alone. hire a specialist whether it's an attorney or a short sale agent.

worst case you could file bankruptcy and surrender the property. the banks would not be able to come after you for the deficiency and you would keep your primary home.