I am new to myFICO.
I am STRESSED. WE have a 30-year fixed rate mortgage in FLORIDA from 2007 - the peak of the bubble.... Our mortgage payments are near $1700/month and mostly interest. We need to move. We have outgrown the house and we have concerns the neighborhood is not safe for our children. We cannot rent because the most we could get would be $1000/month and we can't afford to pay the $700. We owe ~$200,000 and the bank-appraised market value of our home is $115,000. So we have negative equity in the home (refinance is not an option). My husband and I have good FICO scores (mine was just 765). My husband is under-employed. There are no full time employment opportunities within 150 miles. All that said... We cannot do a short sale. We have tried to do a HAFA short sale twice and denied twice because we are not the required "60 days behind."
Currently, we are considering do a traditional short sale and going "behind" to demonstrate hardship and get it done!! We have a buyer/contract on the house now for $115,000. We have been advised by all (mostly transactional agents, lawyers, etc) that we really need to go behind on our payments in order to do a successful short sale. A successful short sale for us is a) release lien (obviously), but also b) release deficiency rights. We were told that the bank would not do (b) and release near $100,000 if we were current with high FICO scores.... So we have to sabotage ourselves and our FICO scores in order to move?!? So there in lies the dilemma.....
Any help you can provide and assurances or guidance would be soo much appreciated. Thank you! Some questions:
1. Will our credit be hit "harder" since we have higher (765) FICO scores?
2. I don't understand the cumulative impact of missed payments. (We don't pay August, don't pay September - we get "hit" in August and then twice "hit" in September??). I pray that the short sale will be approved QUICKLY so we don't have months and months of "going behind" while the bank reviews our file..
3. In the HOPEFUL event that our short sale is approved, would it be wise to repay the amount owed (in terms of the monthly payments missed during the review)? Would that help our FICO score? (I understand we will be "hit" for (a) not paying our monthly mortgage AND for (b) the short sale agreement - so can we prevent (a) by repaying at the close of the agreement?
4. If the short sale is not approved, can we repay our missed mortgage payments and patch any FICO issues? What would the implications of this be?
We could always try to do a short sale while staying current - however, our hardship and need has not been taken seriously in our two previous HAFA short sale attempts. hate this.
