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Old 08-09-2012, 05:30 AM
 
4 posts, read 7,103 times
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In closing on our short sale. Unfortunately BoA will not release us from the possibility of collecting on the second lien ($54k). Not a HELOC, used to purchase the home. We feel our hands are tied. We have to close, we've moved out of state, we have good buyers and just want to be done with the sale.
We've offered bringing cash to closing or signing a note, they've refused per our attorney. She says it because we have "income". We short saled due to job relocation.
Does anyone have any experience/advice on negotiating the debt after the closing. I don't want this looming over our heads for the next several years. Do we just wait for someone to contact us or do we contact them after the closing to try to negotiate? Our attorney tells us they "reserve the right to collect" which means they could possibly not come after us. I find that hard to believe that they might not try to collect.
Not going thru with the short sale is NOT an option for us at is point.
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Old 08-09-2012, 08:37 AM
 
3,576 posts, read 6,064,542 times
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Questions:

1. Why do you "need to short sale" now? I know it sounds obvious. But have you missed payments? If you haven't missed payments and have income to support the home, that's the probable reason the bank isn't going to let you off scott free.

Cause any tom dick and harry with income can do that and go right back out there and buy another home in another state after they relocated.

So have you missed any payments? That's the key.

If you haven't missed payments, and have income, you need to be very careful cause my wife's ex college roommate has the bank garnishing $300-400 a month from her checking account when you defaulted on a home loan. She finally declared BK.

So you need to think carefully before "needing" to short sale without going through all your options. You need to negogiate everything before you close. Bad idea to close without getting things on paper from the bank that they will not go after you.

Can you rent it out for a small loss?

Are you trying to buy another home?

What state are you selling the home in? My wife ex college roommate is in Virginia and the lender pursued her for a deficiency judgment and garnished her wages.
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Old 08-09-2012, 09:42 AM
 
4 posts, read 7,103 times
Reputation: 10
We had to relocate to another state for my husbands job. If we didn't he would have lost his job.
The house has depreciated 130k in the 4 years that we bought it. If wasn't for the employment issue we'd still be there no problem.
We never missed payments UNTIL May because we had to move and could not afford both homes.
Renting it out would not be an option between mortgage, taxes and upkeep plus what we'd get for rent. We'd be over $1000 negative each month. Plus we'd have to hire someone to manage since we are 4 states away.
My kids are enrolled in school, I have a new job and we have a 2 year lease on our home we are renting now so that's why we say the short sale needs to happen. We don't want to foreclose and bankruptcy is not an option.
At this point buying another house is not what we want to do. Pretty soured on the "American Dream" of owning a home.
The home is in NJ.
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Old 08-09-2012, 10:01 AM
 
936 posts, read 1,834,142 times
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You had mentioned bringing cash to the closing. I'm confused about that- do you mean that you'll bring some money to closing that can partially pay off the 2nd?

Usually your best option for dealing with a 2nd lien holder is long before you put your house on the market. The lien holder tries to figure out their chances of you going into foreclosure on your 1st mortgage and them losing everything. But once you put a transaction together then they realize that there is no longer any risk in losing their money, so they're least likely to negotiate at that point.

Though I'm against it morally, many sellers willingly go into foreclosure with their 1st mortgage so that the 2nd postion is put at risk. That's when the 2nd position lender is more willing to negotiate. As a practical matter, it doesn't appear that lenders are enforcing the note after they allow a short sale. But that is indeed everyone's concern and only the future will show us what eventually happens.

The amount of your 2nd kind of falls into a category where a lender realizes that a mid-to-high income earner might be able to pay it off in the future.
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