topic Re: Short sale for moving out of state, two lenders in Mortgage Loans

Short sale for moving out of state, two lenders

Gina1 — Fri, 02 Oct 2015 18:12:49 GMT

Hello,

I want to move out of state for a career change (do not currently have a job offer in new state). I have two mortgage loans. I have been in my house for ten years now, but it is now worth less than the loan due to falling property values in the area. I have an excellent credit score due to my always paying bills on time.

I recently met with a real estate agent who said a short sale is the best option due to poor comps. I do not want to rent out and leave because I won't have the funds to pay mortgage here if the house is not rented, and also pay rent in the new state; and it may be several years before property values go up again; and I just don't want that kind of headache. I also don't want to deliberately fall behind on mortgage payments to show hardship, because I feel that is very irresponsible and also don't want that kind of hit on my credit.

Question: is the short sale the best idea? And, if I go to the two lenders and say that I want to move because of a career change, will they say no? What should I tell the two banks?

I am so sick of living here. I am grateful for my cute single-family home and my safe job with great benefits, but there comes a time when one feels one must contribute in a deep way to society with one's real talents. I want to be in a state where there actually are job prospects for the field I want to work in. Plus, the cold winters are getting to be way too cold for me (you guessed right, I am on the east coast now), and there's a ton of rain here. Crime is also rising in the area I am in, and they recently built a Dollar Store down the road from my house, which is a bad sign as well.

What do you guys think?

Thank you.

Re: Short sale for moving out of state, two lenders

StartingOver10 — Fri, 02 Oct 2015 23:13:22 GMT

Where are you that the housing market hasn't rebounded yet? What town/state?

Re: Short sale for moving out of state, two lenders

ezdriver — Sat, 03 Oct 2015 18:02:06 GMT

@Gina1 wrote:
Hello,

I want to move out of state for a career change (do not currently have a job offer in new state). I have two mortgage loans. I have been in my house for ten years now, but it is now worth less than the loan due to falling property values in the area. I have an excellent credit score due to my always paying bills on time.

I recently met with a real estate agent who said a short sale is the best option due to poor comps. I do not want to rent out and leave because I won't have the funds to pay mortgage here if the house is not rented, and also pay rent in the new state; and it may be several years before property values go up again; and I just don't want that kind of headache. I also don't want to deliberately fall behind on mortgage payments to show hardship, because I feel that is very irresponsible and also don't want that kind of hit on my credit.

Question: is the short sale the best idea? And, if I go to the two lenders and say that I want to move because of a career change, will they say no? What should I tell the two banks?

I am so sick of living here. I am grateful for my cute single-family home and my safe job with great benefits, but there comes a time when one feels one must contribute in a deep way to society with one's real talents. I want to be in a state where there actually are job prospects for the field I want to work in. Plus, the cold winters are getting to be way too cold for me (you guessed right, I am on the east coast now), and there's a ton of rain here. Crime is also rising in the area I am in, and they recently built a Dollar Store down the road from my house, which is a bad sign as well.

What do you guys think?

Thank you.

You have made your case for the move. I applaud your thinking. Life is a one-act deal so follow your heart and your dreams.

A short sale is you best option. Get it sold and move on. There will be a hit to your credit but that should not stop you from pursuing your dreams. I have filed ch7 bankruptcy and recovered in a relatively short time to buy a new home. Do not be discouraged. With a short sale, the lender will have to approve the deal but it will if a reasonable deal. Follow the guidance of your real estate agent. All the best to you and please let us know how things go for you.

Re: Short sale for moving out of state, two lenders

StartingOver10 — Sat, 03 Oct 2015 23:03:15 GMT

Be very careful.

The lenders are not nearly as good as accepting short sales today as they were a couple of years ago. Many of the lenders are prefering to foreclose rather than accept a short sale offer.

Make sure your Realtor is giving you accurate current market pricing. What was short a year ago in many metro's is not short today. In fact, get several Realtors to give you market analysis or hire an appraiser.

The short sale will mean that you can not get another mortgage for 3 years (FHA) minimum or 4 years (minimum) for conventional mortgages. The time period starts from the date of transfer of deed from you to the new buyer - assuming a short sale is accepted by both your lenders.

Re: Short sale for moving out of state, two lenders

Anonymous — Sun, 04 Oct 2015 00:48:27 GMT

Research deed in lieu of foreclosure if your banks don't accept the short sale. Wells Fargo told me they report a deed in lieu the same as a short sale on credit report.

Re: Short sale for moving out of state, two lenders

Gina1 — Sun, 04 Oct 2015 03:49:35 GMT

Baltimore, MD. If you look on Zillow the prices look great, but once you do comps you'll see 3-bedroom, 2-bath houses going for 120K. We thought we were good until the agent did the comps and that's when we saw the problem.

Re: Short sale for moving out of state, two lenders

Gina1 — Sun, 04 Oct 2015 03:48:05 GMT

Thanks so much for responding. Your answer has encouraged me. Do you know if it matters what I tell the two lenders as to the reason for the short sale request? I mean, if I tell them I want out because I want to make a career change - as opposed to financial hardship (which I currently don't have) - will that make them say no? Or does the reason even matter? Also, do you know if they can see how much is in my 401K?

Re: Short sale for moving out of state, two lenders

StartingOver10 — Sun, 04 Oct 2015 07:59:44 GMT

You have to have a hardship to get approved for a short sale.

Part of the documentation you provide is a copy of ALL of your statements and financial documents: bank statements, all your asset accounts including 401k's, paystubs, tax returns etc. The documentation required to go through a short sale is very extensive, similar to applying for a mortgage. The difference is this: when you apply for a mortgage you are showing your financial capacity to pay. When you are applying for a short sale, you are showing your financial hardship and the INABILITY to pay the mortgage(s).

Re: Short sale for moving out of state, two lenders

vitacredit — Fri, 16 Oct 2015 07:08:15 GMT

You will also need to consider the tax implications, for the amount forgiven by banks, tax waiver was not extended to this year. Your 401k should be safe, it is a retiement account. Speak to a few Realtors in the area that have recently done and have lots of experience with short sales. Every short sale is very unique, the banks vary and each homeowners different situation. I'm a Realtor that has completed short sales, but have not done one in a couple years, in South FL we had lots of short sales. Get several local Realtors market analysis, maybe you may be able to avid the short sale. What is the difference between what you owe and what it will sell for?

Re: Short sale for moving out of state, two lenders

Anonymous — Fri, 16 Oct 2015 15:46:03 GMT

When I did mine - years ago - I also had to list the house with a sales price of at least the mortgage value and costs for a while before they would even consider the short sale - basically had to attempt to sell it for enough to cover. After like 6 months - I was able to send additional documents in as to the work needed on the hosue/comps for the area/ financials/ etc. in order for them to accept the price. Overall the house ended up being on the market for over 8 months.....oh and I said the could accept the short sale and get something - or I was including the house in a bankruptcy and they would get nothing....FInally they budged! But not everyone has that leverage (bad as it is) to push a short sale through either..

Re: Short sale for moving out of state, two lenders

StartingOver10 — Fri, 16 Oct 2015 19:02:22 GMT

You are right - not everyone has that leverage because they can afford the house.

Short sales are different than they were just a few years ago. The servicer always looked at your financial condition, but it was more common to be in a hardship and to demonstrate the inability to pay. Now that the economy is in recovery mode it is more difficult to show your hardship and they look for stratgic defaulters. If you have too much income they aren't going to approve your short sale, they will expect the borrower to pay the difference.

Re: Short sale for moving out of state, two lenders

Anonymous — Fri, 16 Oct 2015 19:32:09 GMT

@StartingOver10 wrote:
You are right - not everyone has that leverage because they can afford the house.

Short sales are different than they were just a few years ago. The servicer always looked at your financial condition, but it was more common to be in a hardship and to demonstrate the inability to pay. Now that the economy is in recovery mode it is more difficult to show your hardship and they look for stratgic defaulters. If you have too much income they aren't going to approve your short sale, they will expect the borrower to pay the difference.

Exactly - but the one thing I think that they still make you try to see it for enough first.....then prove that it can't be sold for that - and prove the hardship.....So if you want to move - I would find a realtor that has ability to deal in short sales - and list it for what you owe (plus costs/commissions/etc). You can always reduce the price. But I think you are going to have to show the bank that it can't be sold for the mortgage balance and have proof that you tried.