[toad pad green]

What is better? Foreclose or Short Sale.

I spoke to my bank and they said: “There will be a collection account opened if I do a short sale.”
1. Can they come after my bank account?
2. I how will each affect my credit?

House is In Las Vegas.
I am lousing $800 a month. Can I buy a new home next year and pay for foreclosure insurance for less that $800?

[Daddys///M3]

I'm certainly no expert, but what I've been told by various real estate agents I work with is that a short sale is a much better option than a foreclosure. Recent legislation has been passed that grants debt forgiveness so that you cannot be 1099'd for any deficiency and there will be no deficiency judgement. I've also been told that a short sale shows up on your credit as a balance settled, as if you negotiated with a credit card company to pay off the balance for less than you owe. If the information I've given you is true, I can't see how you would not be able to purchase a home in a year. FHA only requires that you be current and on time on all debt payments for the last 12 months. If a short sale does not show up as a charge off or foreclosure then it should not be an issue. I could be wrong though, as I usually just refer my upside down clients to real estate agents.

If, however, you do go the foreclosure route it will be a good 2-3 years before you can purchase another home. I also have never heard of foreclosure insurance.

[olecapt]

Originally Posted by toad pad green

What is better? Foreclose or Short Sale.

I spoke to my bank and they said: “There will be a collection account opened if I do a short sale.”
1. Can they come after my bank account?
2. I how will each affect my credit?

House is In Las Vegas.
I am lousing $800 a month. Can I buy a new home next year and pay for foreclosure insurance for less that $800?

Do you live in the house? Daddy laid it all out if you do. If you are an investor or it is a second home...different rules. Then you may well have to pay the bank some of the loss to get a short.

[enraeh]

any thoughts from realtors/agents/lenders on that route?

[airics]

how are you losing $800 a month, rent the darn thing!

[toad pad green]

Originally Posted by airics

how are you losing $800 a month, rent the darn thing!

its is rented and Still losing $800 mo

[olecapt]

Originally Posted by toad pad green

its is rented and Still losing $800 mo

You can try for a short sale. It is however likely that the bank will demand some additional payment such as an unsecured note to cover part of the short fall. If you have been making the mortgage payments until now you will likely find it very difficult to reach any other outcome.

You can of course go to foreclosure. The bank just might come after you for a deficiency judgement. Generally not but they may if they suspect you have the money to pay one off. It will for certain rack up your credit for a few years.

All in all it may be better to pay the $10K per annum for a couple of years then see how things look.

[RedRockAAAA]

Maybe someone here can tell you what type of an attorney to contact. Sounds like a limited expense consultation would help your nerves. It must be stressful. It would help my stress level for sure, if I were in those circumstances. Good Luck

[madtown]

There are few different routes you could take, but you will definitely want to stay out of foreclosure. You will not be able to buy another house for probably a minimum of 5 years, and you'd be lucky to get something within 7 years. A short sale to an investor might work (what size property is this, where is it located...I may be interested). A deed in lieu of foreclosure might work as well. It will keep the bank off of the property for a little bit as long as payments become current. Of course you would lose your property and not get anything for it. When in doubt call a foreclosure lawyer like Red Rock mentioned.

[Daddys///M3]

Originally Posted by madtown

There are few different routes you could take, but you will definitely want to stay out of foreclosure. You will not be able to buy another house for probably a minimum of 5 years, and you'd be lucky to get something within 7 years. A short sale to an investor might work (what size property is this, where is it located...I may be interested). A deed in lieu of foreclosure might work as well. It will keep the bank off of the property for a little bit as long as payments become current. Of course you would lose your property and not get anything for it. When in doubt call a foreclosure lawyer like Red Rock mentioned.

3 years out of foreclosure for FHA, 5 years out for conventional. Lenders are considering shorts and deeds in lieu the same thing as foreclosures. The short sale or deed in lieu of FC will ease the hit on the credit score though.