Short Sale advice- sorry if questions are redundant - Mortgage Forum

bella2001 · 02-26-2009, 06:56 AM

My husband and I moved from PA to Fl for his job. Now looks like the company won't last to the end of the year. We are current on our mortgage (with WaMu/Chase) but with the pending closing of his work we want to move back to PA where we know he has a job waiting-although we would be moving in with his mother. He gets paid 2x a month but the timing is always iffy. He didn't get paid at all in December. We bought the house for 215k, put 11% down and have a 1st (bal. 168K) and a 2nd (bal. 20K) so total (both w/WaMu/Chase) for 188K. Mortgage is a 10/1 Arm- interest only- set to adjust in 2017. We spoke to two realtors-both have experience with short sales and the 2nd realtor suggested trying to rent it. We spoke to an accountant and lawyer who both said to go for a short sale. The lawyer said that since we are current on our mortgage no bank would consider a short sale so to immediately stop paying. This seems crazy to me. Do I attempt to contact the bank and explain the situation? We have a 401k, IRA and pension-will they expect us to liquidate them to pay the difference between loans and buyer price-assuming we can get a buyer?

bella2001 · 02-26-2009, 06:58 AM

Meant to add as far as husbands work is concerned- he will stay until the company closes- he's not going to quit- but the closing time frame keeps moving from April to July to possibly Sept. I am recently unemployed- laid off.

Dan Bailey · 02-26-2009, 07:43 AM

Bella,
You will need to contact the bank and inform them of your decision. Each has criteria for short sales..most require the home be listed for at least 90 days before consideration.

bella2001 · 02-26-2009, 08:15 AM

Hi Dan,

Thanks for reply.

Listed for sale for 90 days? Or behind in payments for 90 days? Or both?

It seems so a$$-backward to stop paying mortgage although it doesn't really help in reducing the principle since its an interest only- would really just be throwing it away. Do I call the bank now before its listed and tell them that while we can pay the mortgage right now in three months we might not and that I want to do a short sale? Or list the house as a short sale, get behind in the mortgage and then call? I am just terrified of starting this whole process. I feel like we are not as bad off as some people and that if I call the bank right now they'll laugh at us and think we're trying to get away with something.

Dan Bailey · 02-26-2009, 08:19 AM

Bella,
yes, the first thing to do is contact the lender.