Evaluating short sale risk

[luv3kids]

Hi! Can we sell the home without the banks approval if were in foreclosure and we are not underwater? Is it still a short sale even if you have equity in the home? Trying to get HAMP but the bank isnt approving because of the equity. Any suggestions?

[Elke Mariotti]

Originally Posted by luv3kids

Hi! Can we sell the home without the banks approval if were in foreclosure and we are not underwater? Is it still a short sale even if you have equity in the home? Trying to get HAMP but the bank isnt approving because of the equity. Any suggestions?

If you're not underwater, it's not a short sale.

A short sale happens when the balance of the mortgage owed (plus possible expenses) is more than the market value minus selling expenses.

Example:
$450,000 mortgage balance including accrued fees, etc.
$400,000 sales price (before or after commission, etc.)
$ 50,000 "short"

[luv3kids]

Thanks so much, I understood the idea but wondered why the bank kept offering it as a solution? I also started to wonder if they use the term to describe any sale of property that's involved in forclosure proceedings? I guess its okay to sell then without their approval? We don't want to wait until its too late since they aren't willing to modify the loan as of yet. We are thinking that we better try to sell and clear the debts rather than stay and keep playing the waiting game.