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Old 08-18-2008, 01:23 PM
 
24 posts, read 78,205 times
Reputation: 29
Default Short Sale Question

Hello, I'm new to this website, and it looks like there is some good advice to be had. I have some specific questions and would appreciate specific anwers.
I have a house in Las Vegas that is terribly upside down. Bought it in 2003 for 250K, refninanced cash out 100K in 2005. I moved to California for work a year ago and I can't sell this house to save my life. I've been shelling out 2800 for a year, and it's put a huge dent in my savings.
I now have a short sale contract on it for $235,000. I'm sending all the docs into Countrywide to start the process. My problem is two-fold. First, I don't think Countrywide is going to agree to the terms of the short sale. I make decent money, and if I'm willing to deplete my savings completely and live paycheck to paycheck, I could conceivably afford the combined payments of my house in Vegas and my new house in CA. I'm not willing to do that, deplete my savings anymore.
Secondly, because countrywide is asking for detailed financial information about myself, they will be able to use that against me if the Vegas house goes into foreclosure and a deficiency judgement is sought. I'm in my late forties and don't have much retirement saved up. OK, I made some mistakes in the past, living in Vegas was one of them, getting into this mess is another. But now I need to make the right decision for myself and my family. Help please!
Should I move forward with the short sale and disclose all of my financial information to CW. Or, simply let the house go, walk away, and lawyer up for a future bankruptcy?
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Old 08-18-2008, 01:39 PM
 
Location: Pennsylvania, USA
5,218 posts, read 2,092,528 times
Reputation: 908
Quote:
Originally Posted by whatshouldido View Post
Hello, I'm new to this website, and it looks like there is some good advice to be had. I have some specific questions and would appreciate specific anwers.
I have a house in Las Vegas that is terribly upside down. Bought it in 2003 for 250K, refninanced cash out 100K in 2005. I moved to California for work a year ago and I can't sell this house to save my life. I've been shelling out 2800 for a year, and it's put a huge dent in my savings.
I now have a short sale contract on it for $235,000. I'm sending all the docs into Countrywide to start the process. My problem is two-fold. First, I don't think Countrywide is going to agree to the terms of the short sale. I make decent money, and if I'm willing to deplete my savings completely and live paycheck to paycheck, I could conceivably afford the combined payments of my house in Vegas and my new house in CA. I'm not willing to do that, deplete my savings anymore.
Secondly, because countrywide is asking for detailed financial information about myself, they will be able to use that against me if the Vegas house goes into foreclosure and a deficiency judgement is sought. I'm in my late forties and don't have much retirement saved up. OK, I made some mistakes in the past, living in Vegas was one of them, getting into this mess is another. But now I need to make the right decision for myself and my family. Help please!
Should I move forward with the short sale and disclose all of my financial information to CW. Or, simply let the house go, walk away, and lawyer up for a future bankruptcy?

Hmm.. well I don't know.. This is a tough one... Apparently theIf they can cmoe after you in Vegas for the difference, no?

Can you continue to, WITHOUT dipping into your savings.. keep paying the mortage on the house in Vegas? If the answer is no...then you'll need to prove to them that your current salary does not meet your current financial obligations. Because obviously your savings WILL run out and you'll have nothing to draw from to meet your obligations..the bank should realize this and do they want to wait adn take the hit now or later. . and as prices keep declining.. they are better tryin to get it sold now (either short sale or foreclosure)

secondly..is renting the house out a possibility? If so,you should do it.. rent it out and ride it out..because apparently in Vegas they can come after you for the difference.. here in NY they can't... the mortgage is simply secured by the property and they can't get judgement for the difference.

Otherwise, it will seem the ONLY other thing you could do is to take your money OUT of the bank (make them think your savings is already depleted) and hold it in cash (get a nice safe..LOL) so that they have nothing to levy.. and show them you have no other assets for them to come after. Keep only what you need for your basic bills in your checking account.. then go for the short sale.. and if you can't short sale.. then it will foreclose. You'll have to declare bankruptcy then , I guess, to not be obligated or to work something out for the differene between what they get and what they owe.

i would really hide your cash assets and short sale.. there's a better chance of getting more through a short sale than the bank will get on a foreclosure. don't have any clue what that would do for your non liquid assets.. 401K etc.. Can they really come after you for that , if that is all you have (because it's for retirement??)... can they levy that or force you to cash out your non liquid assets (stocks or bonds) .. I don't know.. for that you'll have to consult with an attorney...

But.. hide your savings.. take it OUT of the bankn and hold onto it so that they can't get it. After all you'll need that later for your retirement.. and so that you can continue to take care of yourself. Bankruptcy would protect them from seizing any other non liquid assets you have (car, etc) in a judgement, I think..

good luck.. and i'm not expert.. so please take my advice with a grain of salt and really ask a lawyer.....
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Old 08-18-2008, 02:23 PM
 
Location: Fort Myers, FL
1,286 posts, read 1,895,317 times
Reputation: 248
Quote:
Originally Posted by TristansMommy View Post
Hmm.. well I don't know.. This is a tough one... Apparently theIf they can cmoe after you in Vegas for the difference, no?

secondly..is renting the house out a possibility? If so,you should do it.. rent it out and ride it out..because apparently in Vegas they can come after you for the difference.. here in NY they can't... the mortgage is simply secured by the property and they can't get judgement for the difference.
that is 1 state out of 50 and you keep repeating it. and i still have a hard time believing you. they can always get a judgment for the difference. once you enter foreclosure they do a search for any other properties you may have and file a public notice on those. they have every right to seek the difference and add the judgment to another property of yours.

Are you tryin to refinance with CW right now? why are you sending them documents?

Quote:
Originally Posted by TristansMommy View Post
Otherwise, it will seem the ONLY other thing you could do is to take your money OUT of the bank (make them think your savings is already depleted) and hold it in cash (get a nice safe..LOL) so that they have nothing to levy.. and show them you have no other assets for them to come after. Keep only what you need for your basic bills in your checking account.. then go for the short sale.. and if you can't short sale.. then it will foreclose. You'll have to declare bankruptcy then , I guess, to not be obligated or to work something out for the differene between what they get and what they owe.

i would really hide your cash assets and short sale.. there's a better chance of getting more through a short sale than the bank will get on a foreclosure. don't have any clue what that would do for your non liquid assets.. 401K etc.. Can they really come after you for that , if that is all you have (because it's for retirement??)... can they levy that or force you to cash out your non liquid assets (stocks or bonds) .. I don't know.. for that you'll have to consult with an attorney...

But.. hide your savings.. take it OUT of the bankn and hold onto it so that they can't get it. After all you'll need that later for your retirement.. and so that you can continue to take care of yourself. Bankruptcy would protect them from seizing any other non liquid assets you have (car, etc) in a judgement, I think..

good luck.. and i'm not expert.. so please take my advice with a grain of salt and really ask a lawyer.....
They are not the IRS than cant withdraw money owed, lol. Your money is fine and safe. They can however at the end of it all, garnish your paycheck if they file for it. But most likely wont do that. I would stop paying for it, short sale it if you can, forclosures are taking almost a year as of now to complete. Either way it will be done and out of the way. perhaps in 3-5 years you can just refinance your cali home and pay off any jugdements there may be if any. Of course your credit score will be in the ****ter, but thats what wifes are for! I hope she isnt on the loan.

FYI if you have the option of refinancing, do it to get her off, leave her off the property on purpose, she will still be on title and spousal docs, but if she isnt on the loan then you can use her credit from now on till yours is better. remember keep her off it or have her removed prior to refinancing.
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Old 08-18-2008, 02:28 PM
 
Location: Pennsylvania, USA
5,218 posts, read 2,092,528 times
Reputation: 908
Quote:
Originally Posted by brokerdave View Post
that is 1 state out of 50 and you keep repeating it. and i still have a hard time believing you. they can always get a judgment for the difference. once you enter foreclosure they do a search for any other properties you may have and file a public notice on those. they have every right to seek the difference and add the judgment to another property of yours.

First.. I own no other properties.. and you are wrong.. I checked with my attorney. In NY State (and it's not the ONLY state, btw.. just the one I'm in and know about) they loan is secured by the property.. .. and the rest of the debt is forgiven. Believe me, don't believe me.. but i know. Apparently Vegas is Not one of those states.

Are you tryin to refinance with CW right now? why are you sending them documents?



They are not the IRS than cant withdraw money owed, lol. Your money is fine and safe. They can however at the end of it all, garnish your paycheck if they file for it. But most likely wont do that. I would stop paying for it, short sale it if you can, forclosures are taking almost a year as of now to complete. Either way it will be done and out of the way. perhaps in 3-5 years you can just refinance your cali home and pay off any jugdements there may be if any. Of course your credit score will be in the ****ter, but thats what wifes are for! I hope she isnt on the loan.

FYI if you have the option of refinancing, do it to get her off, leave her off the property on purpose, she will still be on title and spousal docs, but if she isnt on the loan then you can use her credit from now on till yours is better. remember keep her off it or have her removed prior to refinancing.
the rest, I'm sure, is not in response to me, but in response to the OP right.. because my situation is not hte same..

my mortgage is not with countrywide.
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Old 08-18-2008, 02:53 PM
 
Location: Fort Myers, FL
1,286 posts, read 1,895,317 times
Reputation: 248
the debt is ONLY FORGIVEN in a short-sale and that is federal law/tax free (as of now for the next few years).

i think you are mixing up foreclosure and short-sales. i am still unclear as to what you think is NY specific.

in any foreclosure the bank can attach a judgment. if you are allowed a short sale, that means the bank has forgiven the debt and it is no longer owed.
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Old 08-18-2008, 06:24 PM
 
43 posts, read 155,450 times
Reputation: 32
Tristansmom is correct. In a purchase money loan, the mortgage is secured by the property. They can only come after the property. Now that all changes if you took money out on a refi. Also, if your primary residencs is foreclosed upon and their is a balance due after sheriffs sale, you no longer owe the IRS the taxable income like before.
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Old 08-20-2008, 09:33 AM
 
930 posts, read 1,493,851 times
Reputation: 961
Is your "savings" part of that 100k you pulled out during the refi?

I would almost say that kind of belongs to them anyway, and yes they will pursue deficiency judgement.
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Old 08-21-2008, 12:37 PM
 
24 posts, read 78,205 times
Reputation: 29
Beena, as usual, you look to belittle the poster. Seems you have something personal againt people who are forced to walk away from their mortgages.

Anyway, my 100K cash out broke down like this:
50K to pay off original purchase money second mortgage. 30K to pay off car and credit cards. Yes, lender require I pay them off in order to get cash out. 3K closing cost. That left me with 17K actual cash out. I only wanted to take out 20K to get through a tough spot, but it ended up being 100K! So, I received a total 50K non purchase from the lender. I've spent 24K just on the second mortgage alone in the last two years. In my book, they've gotten alot of it back already. I just don't have anymore to give them. The 20K to pay off the car helped, but the car is now worth about 9K, given that it is a Ford Excursion that I couldn't sell if I wanted to right now. If the lender wants the truck they can have it if they call things even.
I do have some questions about the lender requiring me to payoff auto and credit cards in order to take cash out. Heck, it almost sounds fraudulent. Why mess around with a 20K cash out when you can go for 100K? 3K for closing costs for a HELOC is rediculous, I think. But like I said, I was in a jam and took out the money just like everyone else did in 2005. Anybody know if the lender requiring me to take a loan for 100K when all I wanted was 20K is kosher or not?

Also, a little more research uncovered information about Nevada judgements and my particular situation:
The lender can go after my current home, if it is not my homestead. Does anyone know how this breaks down if the state I currently live in does not have homestead laws?
The lender can attach a lien to other real property I own. Does anyone know if a quitclaim deed to a trust fund or spouse prevents this? No, my wife is not part of the subject property.
The lender can garnish 25% of my disposable income. Does this still apply if I'm the Head of Household?
Thanks for your responses.
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Old 08-21-2008, 03:46 PM
 
Location: Great State of Texas
73,363 posts, read 33,555,639 times
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My suggestion to you is to go talk to a real estate attorney, one who is famliar with your state and can inquire about the other state.

Do not take posts on an internet forum as fact..you may live to regret it.
It will be well worth the money spent on a lawyer if you can preserve your current home and future earnings.
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Old 08-21-2008, 07:44 PM
 
43 posts, read 155,450 times
Reputation: 32
HappyTexan,

Thanks for stating the obvious. Don't mean to sound harsh here, but insight is what people are looking for.... before they go to a lawyer. Unfortuantely, one can't visit an attorney in the middle of an anxiety panic attack, so they blog about it on forums like this. whatshouldido, and myself need answers, preferably by people who are in the know, and not from mean people like beena and bentlebee. Those meanies hopefully will never know what it's like to carry a burden like this for two years. They are TOO SMART to make mistakes.
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