Waiting on foreclosure, what can I do

[Anonymous]

I lost my job in Massachusetts in 2009 and had to stop paying my mortgage. In early 2010 the letters started getting really nasty and I moved before one day a sheriff was going to wind up moving me. It's now early 2013. The house has not been foreclosed yet, or any legal papers filled against me. I looked up my credit report and the balance is stated as 275k with 75k past due. I want to just close out that chapter in my life and move on considering it's been so long since I last paid that mortgage it's about to age off my credit report from my understanding in another year or so. The home's value has gone up a bit since then, I think 300k is a reasonable price I could sell it for. Is the total I would owe to Chase 350k or so at this point or could something be worked out for the principal + some interest? I just don't want to have a foreclosure more than 6 years after I stopped paying the mortgage then hit me for another 7 years, thrashing my credit rating for almost a decade and a half. Way back in late 2009 before I stopped paying I tried to send in paperwork to do a deed in lieu of foreclosure, short sale, or do a mortgage modification (the rate on it is 12%), or anything really, but I literally never heard  a single word back from Chase about anything. After I left I assumed the foreclosure was immiment but it just never happened. What do you guys think is the issue here, and what could I do to best save whatever little credit rating I have left.

[StartingOver10]

If you want to put a stop to the waiting, put the house on the market for a short sale. Chase is offering some large incentive too to the seller. Not every seller will get an incentive, but just putting an end to the waiting part is worth something. Once the short sale shows on your credit report, then you can begin the "healing process" with your credit.

[JM-AM]

+1

Short sale would most likely make the process faster. Just remember the lender has to agree to the short sale.

[StartingOver10]

Exactly, but Chase has been very cooperative lately at least here in my area. The average Chase short sale is about 60 days - unless they actually want the property. That happens too,but rarely. It doesn't sound like your property is high on their list of desirable properties...lol...Interview several agents that specialize in short sales so you can get this property sold and off your mind.

[Anonymous]

In both cases, short sale & foreclosure, they would start affecting my credit score now for 7 years, not 7 years from the first non-payment, right? And in Massachusetts, in both cases, I would still be possibly liable for the difference between the sales price and the principal balance, or is it the principal balance + past due interest? I'm just trying to understand the process and the differences it has from my end besides just finally getting it over since I'm about 1200 miles away from the property and it's been in abject disrepair and neglected for over 3 years now. I have no idea what states it's in, but I can guess.

[MovingForward_2012]

Yes. There was one person on here that said once the house went into short sale mode, his credit report was updated and he went from low 800's to 650. It was dramatic! I don't know if the same wouldn't happen your case but I would read that person's thread here for more info about it, it should be down 5 to 10 pages and the title has the words, "Short Sale", in it. Best of luck to you and I hope everything works out.

[StartingOver10]

If the short sale is approved by the lender and they release both the lien and the debt, then they can't come after you for the deficiency.

If the short sale is approved by the lender and they only release the lien, then they can come after you for the deficiency. However, the length of time varies by state statute of limitations. In Mass you would need to look up what your state says about it. Having said that, Chase has been very good about giving full releases for both the lien and the debt. But you don't know for sure until you actually receive your approval letter from Chase for the specific sale. It will say what is released in writing.

If you close the short sale this year by Dec 31 2013 (and it was your primary residence) then you don't owe income taxes on the deficiency either. But check with a short sale attorney and an accountant to make sure this information applies to you in your specific situation.

The thread that Moving Forward references was the drop in credit score when the seller did not make any late payments throughout the short sale process and he recorded his score (tracked his score) from the time before the short sale was recorded to just after it was recorded. Although he lost points (dropped to about 695) immediately after the short sale his his credit report, now he will be rebounding as he proceeds forward in time. The older the "ding" the less it impacts your score. He should get back into the 700's rather quickly. I don't know how long it will take to get back to the 800's for that poster. It is a thread worth reading.