Which direction to go???

**Advantage4684** · 09-21-2010, 10:09 AM

I have no idea what would be the best move for me. I bought my house almost three years ago, Maryland. I owe around 329,000. My loan is FHA with BB&T and I pay PMI. I am current. I have recently had a child so my wife has quite working, cut our income by 40%. On top of that we are looking to move out of state. I have had my house on the market for 3 months and have had some interest but nothing serious. I have it listed so I will walk with 5k in my pocket and loose my down payment, but its not moving. I will also be loosing the 30k cash that I have invested into the house. I can't seem to find any info on PMI and if that would help me if I walk or short sale. Or is it best to drop the price and walk away with 20k+ in debt? Please give me some guidance...

Thanks

**Evan Bedard** · 09-21-2010, 11:10 AM

Welcome and thank you for joining the community.

Have you checked to see what the current market value of the property is? I'm not too sure if you are aware or not, but in most areas around the country home values have tanked a significant amount since back in 2007. I believe it may be very hard to sell your home for the price you bought it then. Check to see what other similar homes are selling for in your neighborhood so you can get a fair estimate. You may have to drop the price some and list the home as a short sale and take a small loss.

**Advantage4684** · 09-24-2010, 09:21 AM

I understand that it might not be worth what I paid for it, even though I have 30k into it. My question is this. From what I have read, when you have PMI and try to short sale it can be real difficult. That most banks won't even talk short sale because thier loss is covered by the PMI. If they will try a short sale then the Bank and the Insurance company have to come to agreement on a selling price, since the Insurance company is going to pay the difference. Does this mean that the Insurance company would come after me if I forclose, or is that part of the risk that they take? Also is it even worth trying to short sale or should I look into walking away. I have also thought about droping the price past what I owe and selling it with dept as the outcome. Is that a better option?

**Angels** · 09-24-2010, 10:06 AM

In a recourse loan the PMI Company can go after you for the deficiency. Will they? That’s tough to say because some do and some don’t. This could be one of the negotiation points if you short sale or DIL your property. But it sounds like your deficiency will be somewhat low in comparisons to some of the others I have seen so you might be OK on that.

**Advantage4684** · 09-24-2010, 12:20 PM

What is the point in paying PMI than? If I get in a car accident the insurance doesn't come after me for the amount they have to pay out. Is there a way to find out if they will come after me for the difference? If that is the case I would rather just drop my asking price and sell the house, than pay off the difference on my own.

**Angels** · 09-24-2010, 04:09 PM

i had the same question when i realized i would miss my first payment. i thought, well i have been paying PMI insurance so that should cover any owed difference. through this forum, i learned that PMI insurance is insurance that the bank gets to cover the loan but the bower pays it on the banks behalf. it really threw me for a loop to learn that i had been paying insurance on the banks behalf only to have that same insurance look to come after me for a deficiency. the banks set everything up in their favor at the cost of the homeowner. another scam by the bank if you ask me.

What happens when PMI is involved is your servicer will negotiate with the PMI company when it comes to a SS or DIL. at least that is what they did with us.