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New Contributor
Project17
Posts: 137
Registered: ‎11-21-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

So let me understand this. Some of you are short selling your house but are worried about lates showing on your reports.. So why are you selling your house if you can and are able to make your payments? 

 

You should be suffering from some sort of financial hardship and be behind on your payments before the bank even considers a short sale no matter what. That just leaves the door wide open for people to simply walk away from the house and leave their neighbors with even less value in their home! My sister just had to do a short sale but she was unemployed for a year and did the best she could with paying the mortage before she couldn't do it any more.

 

Things really need to change in this country before its to late.. The things that are allowed are crazy.. After a short sale or foreclosure you should have to wait atleast 5 to 7 years before being able to buy another house.. You need time to recover and be able to save money for a downpayment and money for emergencies which your not going to be able to do in junta a few years. The worst thing you can do is buy a house and have no money in the bank which is what a lot of people do, they have just enough for a downpayment and nothing else.

New Contributor
UplandCitizen
Posts: 54
Registered: ‎10-18-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

[ Edited ]

Project17 wrote:

So let me understand this. Some of you are short selling your house but are worried about lates showing on your reports.. So why are you selling your house if you can and are able to make your payments? 

 

You should be suffering from some sort of financial hardship and be behind on your payments before the bank even considers a short sale no matter what. That just leaves the door wide open for people to simply walk away from the house and leave their neighbors with even less value in their home! My sister just had to do a short sale but she was unemployed for a year and did the best she could with paying the mortgage before she couldn't do it any more.

 

Things really need to change in this country before its to late.. The things that are allowed are crazy.. After a short sale or foreclosure you should have to wait atleast 5 to 7 years before being able to buy another house.. You need time to recover and be able to save money for a downpayment and money for emergencies which your not going to be able to do in junta a few years. The worst thing you can do is buy a house and have no money in the bank which is what a lot of people do, they have just enough for a downpayment and nothing else.


I'm not sure if you read all the posts, but I do have a hardship in that my wife is no longer working and we can no longer afford the house on my sole income.  The bank does require a hardship and documentation to prove the hardship.  In my case, the bank spent a lot of time gathering our income documentation, bank account information, tax information (directly from the IRS) and  verified my wife's lack of employment with her prior employer. 

 

As for short selling without being late, we realized that within several months we would no longer be able to afford our house and would start missing payments.  Instead of sitting on the sideline, we proactively contacted the bank, listed our house for a short sale, found a buyer, submitted tons of paperwork including all that was listed above and a declaration of hardship.  The bank after spending 60 days completing their investigation approved the short sale.   In fact, we qualified for a HAFA Short Sale with the government because of our hardship.

 

As for the FHA allowing short seller to buy again immediately if they are not late, probably factors in many things.  First, it encourages people to take really look at their financial conditions and plan accordingly,  Banks/investors continue to received payments while a short sale is pending.  The alternative would be that people would just stop paying for 1-2 years and then let the bank foreclose or then approve a short sale.  Additionally, banks and the government probably realize the people that short sell probably keep the property in better condition because they are selling it versus not caring about the property (striping it of fixtures) during a foreclosure.   Also, FHA probably realize that people may need to short sell to move with a job that is relocating.   There are many benefits to encourage people to keep paying while completing a short sale. 

 

Trust me, it is not easy paying a mortgage on a house you know that will be eventually lost to a short sale or foreclosure.  It would have been much better financially to simply live in the house without paying a mortgage for a year.  Imagine how much money could be saved if we stopped paying for a year, but instead we drained our saving trying to keep up with the payments while our short sale was pending. 

 

 

 

 

 

 

 

EQ: 806 (10/10/2012)
TU: 811 (11/25/2012)

After Short Sale 11/20/12:
EQ: 694 (12/1/2012)
TU: 677 (12/5/2012)
Member
esg
Posts: 21
Registered: ‎10-01-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

Before you make sweeping generalizations about other people's situations, you may want to read a little closer. I have stated that I am not able to make any more payments. In my case I am selling my home due to my 2010 divorce. Neither my ex nor I could individually afford to stay in our home, so we did the responsible thing and rented it out for two years, even though this meant an $800 a month loss. Both of us have been extremely responsible in doing the right thing by continuing to pay the mortgage and hang on to the house. It wasn't until my ex husband lost his job this summer and stopped contributing to the home that I began the short sale process in a proactive effort to avoid losing the home by foreclosure.

 

I see nothing wrong with being proactive and the banks are realizing this is beneficial to them too. They are not waiting for you to miss a payment as long as you can prove hardship or imminent hardship, which I did. I have made as many payments as I possibly could throughout the long short sale process. Why are you surprised that I care about my credit score? I have worked hard and been responsible my whole life which is reflected in my current high score. My ex and I had good jobs and substantial savings when we bought the home in 2001. Times changed and the market in California crashed hard. This was not personally my fault, but rather terrible timing.

 

I know there have been people who have taken advantage of the system and “walked away” often after collecting months of rent and saving up fat down payments for their next home. These people should have to wait to buy and likely will…having terrible credit scores from all the months of mortgage delinquencies. So please understand not everyone that needs to sell his or her home is a loser. They may just need to sell their home! I don't plan to buy another home right away. Like you said, I need time to recover financially.

Member
esg
Posts: 21
Registered: ‎10-01-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

Thanks for your kind words. Yes the delay is unfortunate, but I am confident that I can re-build both my savings and credit over the next few years. And, I can at least say that I honestly tried!

New Contributor
Project17
Posts: 137
Registered: ‎11-21-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

My comments weren't directed towards you in particular.. My point was the banks should not be allowing people to just walk away from paying a mortage especially if they are paying on time with no lates.. This is more of a problem with government intervention and forcing the banks to do certain things.. A bunch of programs exist in which you can slash your payments almost in half.. That is something that should be tried first to see if it would work and if your income can support something like that then that should be your only option. Again not towards you just in general. And a good 5 to 7 year wait on another mortage is a real good idea. 2 or 3 years just isn't a good idea and just looking to cause more problems.

 

New Contributor
UplandCitizen
Posts: 54
Registered: ‎10-18-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.


Project17 wrote:

My comments weren't directed towards you in particular.. My point was the banks should not be allowing people to just walk away from paying a mortage especially if they are paying on time with no lates.. This is more of a problem with government intervention and forcing the banks to do certain things.. A bunch of programs exist in which you can slash your payments almost in half.. That is something that should be tried first to see if it would work and if your income can support something like that then that should be your only option. Again not towards you just in general. And a good 5 to 7 year wait on another mortage is a real good idea. 2 or 3 years just isn't a good idea and just looking to cause more problems.

 


Unfortunately, I tried to get a loan modification prior to the short sale, and at the same time of the short sale process.  The bank could have approved a loan modification given we provided them with all our financial information, but the bank didn't and chose the short sale instead.  Trust me, it's not easy getting a loan modification.  I know a family that has been on a trial modification for months, just to find out that the bank denied their permanent loan modification.  

 

As for not approving a short sale on a imminent hardship, would you rather that we waited until we absolutely could not longer pay the mortgage, then live in the house for a year saving money and selling off fixtures?  Or, is it better for the bank that we short sell the property and continue paying the mortgage until the short sale is complete?

 

EQ: 806 (10/10/2012)
TU: 811 (11/25/2012)

After Short Sale 11/20/12:
EQ: 694 (12/1/2012)
TU: 677 (12/5/2012)
New Contributor
Project17
Posts: 137
Registered: ‎11-21-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

[ Edited ]

Yes it probably would be better if you stayed in the house without paying the mortgage for a year! If making your payments why is the bank motivated to do anything for you?

Like I said my sister did a short sale and it took along time and at the beginning they wouldn't do much for her but as time went on it was amazing all of suddenly what they could do of here in terms in red using payments or even just forgiving money owed etc.. Of course doesn't do much good since she didn't have any income coming in.

 

What is better for the bank or tax payers? Everyone has to remember how much money was poured into this mortgage mess by the taxpayers.. The government should have stayed out of the whole thing and let it crash and burn and we all would be in a better place today. They just prolonged the whole process and didn't do much to help besides give money to large private companies.. If they wanted to give away money they could have just paid people's homes off for them.

Member
esg
Posts: 21
Registered: ‎10-01-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

The banks are motivated because they would rather not take back a house that has had everything stripped out of it and have to sell it at auction at and even lower price, hurting the value of the neighborhood more. It is not in the bank's interest to spend their money repairing damage to a stripped down house or a vandalized vacant property with dead landscaping. It can also cost thousands of dollars to evict a homeowner or tenant during the foreclosure process. Again, you can only get short sale approval if you prove hardship. Hardship means you cannot make mortgage payments for long. Your argument about what's in the bank's best interest is a weak one. And your complaint about the governments involvement is another issue altogether, and not the topic of this particular forum.

New Contributor
UplandCitizen
Posts: 54
Registered: ‎10-18-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

My EQ fico score went from 806 to 694 after the short sale without any late payments.  The short sale closed around 11/20/12 and I received notice on December 2, 2012 via ScoreWatch that my score had decreased because of the short sale.  I hope this information helps you.  Let me know what happens to you.   You can also see my story in my post. 

EQ: 806 (10/10/2012)
TU: 811 (11/25/2012)

After Short Sale 11/20/12:
EQ: 694 (12/1/2012)
TU: 677 (12/5/2012)
Member
esg
Posts: 21
Registered: ‎10-01-2012
0

Re: 2012 (current info) on the impact of a short sale without late payments.

Wow, that didn't take long.:-( I imagine its pretty disappointing...I guess it's true if you have a high score you fall farther. 692 is still better than a lot of people who haven't gone through this...and not far off from a good score. Since you are the responsible type I'm sure you'll recover before long and the fact there are no late's looks good. Will let you know what happens to my score. Thanks for the info.

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