short sales in MIchigan (real estate, foreclosure, rent)

[lovemygirls0_2]

My husband and I are looking to relocate out of state. We are researching options before doing anything. Like a lot of people, we are upside down on our mortgage and wondering what kind of option a short sale would give us. Anyone have information on how to go about a short sale, how easy it is to do, what kind of mark it puts on your credit, etc???

Our main concern is... would we be able to get a mortgage while our home is up for shortsale??? Does that even come into play for getting a mortgage?

[honesty1022]

I just left Michigan almost two months ago and relocated to Louisville, KY. I thought I would be able to do a short sale on my house and I cannot even find a realtor to list it! They said that they are tired of putting in all the man hours and work and finding a buy and the banks or lending institutions refuse to work with them. I have read hundreds of accounts online saying the same thing, especially about Bank of America (took over Countrywide). They said they do all this work and the banks won't work with them and they wind up going into foreclosure, anyway, after everything that was done.

And I left my house in pristine condition. I've only owned it for 3 1/2 years and the only thing it needs is new windows because it still has the original windows. I bought it from the original owner who lived in the house 50 years!

[kellyward268]

Have you listing your website in Michigan real estate sites? You will get more relevant inquiry from that.

[johnsonkk]

Originally Posted by lovemygirls0_2

My husband and I are looking to relocate out of state. We are researching options before doing anything. Like a lot of people, we are upside down on our mortgage and wondering what kind of option a short sale would give us. Anyone have information on how to go about a short sale, how easy it is to do, what kind of mark it puts on your credit, etc???

Our main concern is... would we be able to get a mortgage while our home is up for shortsale??? Does that even come into play for getting a mortgage?

A short sale is a big ding on your credit. Not as bad as a forclosure, but not good. In order to 'qualify' for a short sale, you have to have a bad record of paying your current mortgage and not paying it on time. Most lenders 'require' that you be 2-3 months behind even before they'll consider this and still want you to write a letter appealing to them to waive the difference of what you owe and what price you are being offered to sell.

Most of the time you have to have a buyer in-the-hand before they will approve your short sale so the lender will know how much they will lose when they approve your short sale. Therefore it's in your best interest to put the house in the best shape you can to try to get someone to make somewhat of a decent offer close to your asking price.

Based on the conditions it takes to get a short sale approved (bad credit history, getting close to defaulting, late bills, less than full mortgage payments), you're unlikely to get any approval for a loan while you are in the process of getting a short sale or shortly afterwards.

If you get a short sale approved, you need to plan on renting where ever you end up and even after all this - you'll be thankful someone was able to buy to your house in Michigan.

[kellyward268]

As I read the information related on short sale in real estate, For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale." When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.

[Coldjensens]

Look at the tax issues too. You may have to pay taxes ont he difference. there is a temporary hiatus on those taxes for some people, but I think that it made be limited to foreclosed homes.

[RJ17015]

Short sales are a difficult way to go - it does still affect your credit, but not as long/bad as foreclosure. BUT usually most banks sit on the offer so long, that most buyers walk. It's extremely difficult to sell a house on a short sale. The pp is correct you have to be behind in payments, or the bank won't even talk to you - we tried. Then some people have more than one loan to satisfy (like a home equity loan) then it's impossible to get both lending companies to agree - since one will usually be the one not getting their money.

Bottom line is short sales are almost impossible. What we did was to borrow $ to sell - but we found out that that affect our credit almost as bad as foreclosure - but not as long.

My advice - go buy a house first (if you can) where you're relocating to - you'd be surprised your credit is better now than after you sell. Then after you've bought your new house - stop making payments and either try a short sale then, or foreclosure - but you'll already have your new house/mortgage, and can take the hit on your credit then.

GL

[johnsonkk]

Originally Posted by RJ17015

Short sales are a difficult way to go - it does still affect your credit, but not as long/bad as foreclosure. BUT usually most banks sit on the offer so long, that most buyers walk. It's extremely difficult to sell a house on a short sale. The pp is correct you have to be behind in payments, or the bank won't even talk to you - we tried. Then some people have more than one loan to satisfy (like a home equity loan) then it's impossible to get both lending companies to agree - since one will usually be the one not getting their money.

Bottom line is short sales are almost impossible. What we did was to borrow $ to sell - but we found out that that affect our credit almost as bad as foreclosure - but not as long.

My advice - go buy a house first (if you can) where you're relocating to - you'd be surprised your credit is better now than after you sell. Then after you've bought your new house - stop making payments and either try a short sale then, or foreclosure - but you'll already have your new house/mortgage, and can take the hit on your credit then.

GL

This is a great technique because it actually works - it's being used in California quite a bit but the problem is it's illegal. It's illegal to knowingly and willingly defraud the mortgage company by getting a second mortgage with the intent (and purpose) of never paying another dime on the 1st house. Sure it can by done but saying that's your plan up front is more than just dishonest. While we're at it, let's recommend some 'extra' donations to our favorite charities this year for some tax deductions.

[honesty1022]

Originally Posted by johnsonkk

This is a great technique because it actually works - it's being used in California quite a bit but the problem is it's illegal. It's illegal to knowingly and willingly defraud the mortgage company by getting a second mortgage with the intent (and purpose) of never paying another dime on the 1st house. Sure it can by done but saying that's your plan up front is more than just dishonest. While we're at it, let's recommend some 'extra' donations to our favorite charities this year for some tax deductions.

You're right, it is illegal and a lot of people are getting away with doing exactly that. I think it's going to catch up to some as well. I'm satisfied with renting outside the state. I know my credit is going to take a big hit because I can't sell my house (heck, I can't even get it LISTED) because the lenders do NOT want to work with sellers and realtors. Anyway, being near my family after so many years and being able to see my grandchildren more than 4 days out of the year is a lot more important to me than my credit rating!

[KMTHO]

Why don't you rent out your house rather than going through a foreclosure or short sale?