Short Sale dilemma

[Ricky60]

I lost my job in the banking industry last July and have not been able to find a job since then. We managed to keep all of our obligations current by tapping our savings, however the well is running dry and we need help.

We can no longer afford to stay in our current home based on my meager retirement income and my wife's Social Security Disability.
Our home is on the market and we are facing a short sale situation. Our credit scores are between 760 and 780 and our mortgage payments have never been late.

We paid $210,000 in 2001 and our current mortgage balance is approximately $156,000. Our home has been listed for 6 months starting at $175,000 and has been lowered over time to $134,900. Assuming a sale of $125,000 our first mortgage holder, CitiMortgage could lose approx. $40,000-$45,000. We also have a small second mortgage with BofA for $8,900.

We have three questions.

1. Will the fact that we are current delay in any way the time it takes for CitiMortgage to approve or disapprove the offer? In other words, will we get any quicker response if we are say 60-90 days behind?

2. We are facing a dilemma, we understand that a short sale will have a negative impact on our credit however, if we have a late mortgage payment our credit will be hit twice as hard. We would like to buy a much smaller and more affordable place using our current drastically reduced income, based on our excellent credit what are the chances we could qualify for a new conventional or FHA loan any time soon?

3. Assuming the mortgage companies have all the information they need, what is the approximate time frame to get approval from the first and second lien holders?

Thanks

[Maurice Bedard]

Hi Ricky60,


Welcome to the forum and thank you for joining..............

For a short sale..........the payments don't need to be in default........but a hardship would need to be proven...........you should have already filled out the hardship package........

Time frame varies on investor approval of a short sale and whether or not that would be in their best interest...........they will do a BPO once your agent submits a contract and go from there..........some have lasted longer than 6 months.

If you are able to sell the home as a short sale..........you should be able to buy again in 2-3 years.............if the property goes into foreclosure.......the timeframe is 5-7 years.

[Ricky60]

Cat

Thanks for the quick response.

We hired an atty. to assist with the short sale and she has all the hardship information ready to submit when we receive an offer.

Our concern is that the bank will put our offer on the back burner because we are current with our mortgage payment and prioritize the loans that will soon be or are already in foreclosure. what do you think?


Thanks

[Maurice Bedard]

It is strictly a business decision for the investor..........they will look at what is going to net them the most money............
A hardship is necessary for the short sale............but you wouldn't have to be in default to have the investor approve one...............