Weird Short Sale Situation Need Help! (real estate, renters, second mortgage)

[dakenn04]

So here is the deal. I relocated for my job. After two years of trying to rent (read two sets of renters didn't pay and left us holding the bag for numerous repairs) I finally just quit paying my mortgage payments. I couldn't afford to keep up 3 housing payments- I have exhausted my savings and my 401k.

I have a first for 84K and a second for 35K. When we moved the house appraised at 165K and FMV was $182K. Last October we tried to combine the two mortgages for lower payments and were declined because due to the housing market decline our house appraised at 139K we did not have enough equity to qualify.

Now our first mortgage holder has an offer for a short sale for 70K. They stated on the phone that they had an appraisal done and the house is now worth only $69K!?!?!? It sits on 15 acres of beautiful wooded land and is a 4bedroom 3 full bath home. They are willing to write off the other 14K.

Here is the problem- apparently the second mortgage holder never filed a lien on the property. The title search came back clear (only the first mortgage). My Question is what do I do about the second? What happens if they find out I have sold the property? Should I resume payments on the second even though I will be paying for nothing? My understanding is that I would still owe any amount on a short sale that is not forgiven? Could they start garnishing my wages because there is no longer the collateral of the property?

What is my best move?

[hankejp]

Originally Posted by dakenn04

So here is the deal. I relocated for my job. After two years of trying to rent (read two sets of renters didn't pay and left us holding the bag for numerous repairs) I finally just quit paying my mortgage payments. I couldn't afford to keep up 3 housing payments- I have exhausted my savings and my 401k.

I have a first for 84K and a second for 35K. When we moved the house appraised at 165K and FMV was $182K. Last October we tried to combine the two mortgages for lower payments and were declined because due to the housing market decline our house appraised at 139K we did not have enough equity to qualify.

Now our first mortgage holder has an offer for a short sale for 70K. They stated on the phone that they had an appraisal done and the house is now worth only $69K!?!?!? It sits on 15 acres of beautiful wooded land and is a 4bedroom 3 full bath home. They are willing to write off the other 14K.

Here is the problem- apparently the second mortgage holder never filed a lien on the property. The title search came back clear (only the first mortgage). My Question is what do I do about the second? What happens if they find out I have sold the property? Should I resume payments on the second even though I will be paying for nothing? My understanding is that I would still owe any amount on a short sale that is not forgiven? Could they start garnishing my wages because there is no longer the collateral of the property?

What is my best move?

Not to be mean or sound like an ass, but I would get a lawyer involved.

[Annyz]

I know pretty much NOTHING about real estate. But it could be that the $69K is not actually the appraised value, but the assessed value of the home. The assessed value is determined by a formula used to calculate your property taxes.
Forget fair market value...it means little to nothing. It is just a term used to give you a slight indication of what you MIGHT expect to get for your home based on the housing area sales at a given time of the market.
If it is actually being reported to you as being an appraised value, then you should question whether the appraisal was done by a certified appraiser or just one of the area real estate agents.
I would highly recommend that you discuss this with an attorney that specializes in real estate. A few hundred dollars now might save you thousands in the future.
Good luck to you...sorry about your situation.

[fbh31118]

dakenn04,

You are not the only one in a twisted postion. I also have a home that was appraised at 172,000 that won't even attract a walk thru customer at 104,000.

My family and I had to move for work so there are a lot of us in the same boat, I agree with some others, get a lawyer involved and find out what your options are. I have to do the same thing for myself so don't loose hope, it's just a long road. Normally the first hour with a lawyer is free so get your information prepaired so you get the most out of it.