short sale vs foreclosure in florida

[jjdreamer1]

My wife and I have our primary residence (purchased in june 2004) and a condo (purchased in june 2006). The plan was to sell the house and move into the condo while we put together plans to build a house. (I'm a builder). The market turned and here we are 2 years later. I am also an investor and have/had several investment properties separate from my wife.

We let the investment properties go first (11 of them currently working through the foreclosure process). I alone signed the notes for those 11 properties. We also tried to hang on as long as we could and save the properties where my wife signed the note (our house and the condo). We wanted to save her credit if at all possible. We finally stopped paying on the house and condo in Apr/May to conserve cash.

We put everything up for short sale and started working the process. We received offers on everything and started submitting them to the banks. The one piece of information that killed every one of the deals was that we wouldn't provide tax returns. After meeting with many re attorneys and bk attorneys the consensus was that it would be in our best interest not to provide returns.

Last week the 2nd mtg holder on our primary residence (suntrust) agreed to a short sale without the tax returns. We have to come up with some money to make it happen, but we can handle that. There is enough money in the deal to fully satisfy the 1st mtg (greenpoint).

Our goal: My credit is totally screwed and I may eventually do an individual bk, but we would like to somewhat salvage my wife's credit if at all possible.

Our questions are this:
1) In the interest of saving my wifes credit, is it really worthwhile to make the short sale happen vs foreclosure?

1) If we short sell our primary residence, does the housing bill from Dec 07 protect us from a def judgment and a 1099 or only the 1099?

2) If we short sell our primary residence and make the condo our primary residence might we be able to take advantage of the FHA program passed in July 08 and negotiate the 2 mortgage holders on the condo (chase and citi)? Since I now make $0 we pass the 31% test with my wifes income. I understand the program is voluntary on the banks part, but would we even qualify if we just moved into the condo?

3) How long do we have to live in the condo for it to be considered our "primary residence"?

4) Is there another plan or route we should be investigating?

I have all kinds of other questions, but I thought I should start out with only a few.

Any help would be greatly appreciated.

[schwefls]

Hi jjdreamer1 welcome to our forum:

I wanted to stop and say hello. Shortly someone will be reaching out to you to address your questions and rpovide you with some advice. In the interim please hang in there.

[jjdreamer1]

Did I post this in the wrong place? I am new to this, but I thought it fit in the tell us your story section.

Any advice would be great.

[Cat Damiano]

Hi jjdreamer1,


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

Our questions are this:
1) In the interest of saving my wifes credit, is it really worthwhile to make the short sale happen vs foreclosure?

If you have a real estate agent or real estate attorney well versed on short sale negotiation working on your behalf in a short sale the deficiency could be negotiated as to the amount and the reporting on the credit............this won't happen on a foreclosure............

1) If we short sell our primary residence, does the housing bill from Dec 07 protect us from a def judgment and a 1099 or only the 1099?

If you qualify it would protect you from the tax liability not the deficiency.
Look through the link for the FAQs............but also consult with a real esate attorney and/or accountant to be sure...........
Virginia Foreclosure Law
Mortgage Forgiveness Debt Relief Act


2) If we short sell our primary residence and make the condo our primary residence might we be able to take advantage of the FHA program passed in July 08 and negotiate the 2 mortgage holders on the condo (chase and citi)? Since I now make $0 we pass the 31% test with my wifes income. I understand the program is voluntary on the banks part, but would we even qualify if we just moved into the condo?

since the bill states that you can not own any other properties........you will have to check with FHA as to how long it would be before they would consider the condo the primary residence.......

FACT SHEET: FHA TO PROVIDE ADDITIONAL MORTGAGE ASSISTANCE TO STRUGGLING HOMEOWNERS

3) How long do we have to live in the condo for it to be considered our "primary residence"?

check with FHA on this one...............

4) Is there another plan or route we should be investigating?

You have laid out a plan with your condo that makes sense financially if it can be put into place.................

What are the interest rates on the condo with Chase and Citi?
What type of loans........ie....interest only, adustable, fixed?


Please keep us posted on your progress............

[jjdreamer1]

Thanks for the help. This website is great. I wish I would have found it 6 months ago.

We are still negotiating with Suntrust on our 2nd mortgage, so I will keep you posted as to the progress.

[jjdreamer1]

I wanted to provide some resolution on our loan. Suntrust agreed to take 10% of the loan amount. We owed $250,000, they took $25,000 and agreed to no def judgements. We closed on the short sale last week.

We are now working on the mortgages for our other property.

Thanks for all the help. This forum is great.

[Cat Damiano]

That is great news.........congrats on that.........and good luck on the others!
Keep us posted.........