BiggerPockets

Hello.

Two years ago I purchased my home and I really strapped myself with my payments. I have already reorganized my loan once and now I find myself behind yet again. I don't know what to do. It's clear that I just can't afford my payments anymore so I called my lender (chase) and they told me of a process called "short sale" in which we try to sell the house quick and if it doesn't sell then the bank will forgive the difference that I still owe. They told me my credit will be likely affected by this. They told me that I can also apply for a performance forbearance in which pay suspend my payments during the process as expenses exceed my income.

The frustrating part is when I purchased my home at $134,000 I put another 10K into it to finish the basement. I'm a single mom of two boys who needed more space. The market is terrible and real estate agent friends of mine have told me that I will never get my money back out of it. If I do this short sale and I am able to get the forbearance I could likely save some money which I can use towards renting an apartment.

Over the past year, my credit has been severely damaged. The divorce left me having to use credit cards for just about everything. I'm working with a debt consolidation company now so at least that is under control. At this point I'm not too worried about my credit as there is nothing I can do about it. But...I'm wondering if I decided not to do the short sale and I allowed my house to be foreclosed instead, how long does that stay on your credit report? Also, how long before I would have to leave the house.

I guess my mindset is that my credit is already poor and I need to think about my boys. I will need to save as much possible so that when I need to leave the house I will have a base of money to start with.

Any suggestions??? Pros and cons of short sale and foreclosure would be really helpful. Also, I'm wondering if it Forecloses, does the bank come after you like a credit card company would?

Thanks!

In addition, please be sure to stay in constant communication with the bank. When you talk to someone helpful, write down their extension. Many times, just having a good working relationship with someone in the loss mitigation department can save you a ton of hassle (and time).

Also, if you choose to put it on the market with an agent, be sure to interview the agent to see if they are qualified to handle your problem. Short sales can be complex and time consuming. The process of the short sale is not taught in any traditional real estate courses. You should find someone in your area that specializes in this portion of the industry.

Good luck.

I dont know your numbers on your home but have you called any of the
" we buy houses" signs ? they may be able to take over your payments? lease it from you, buy it who knows....

preferably the investors agent.

Only give the home back if you have to.
If you have to then try to do a short sale.
If you can keep the home.
I worked at BofA in 1993-94 I got call after call from people who bought homes at 200k that were now worth 100K now those same homes are worth 600K. The people who walked away from those homes lost their butts, those who kept them made a lot of money.
This down turn may last another year or so but after that prices will come back.
You have to live somewhere anyway, rent out some rooms or what ever you need todo to keep from losing it.

It is my opinion the bank thinks they will get close to FMV for the house. You hardly ever hear that the bank suggests a short sale. A short sale used to mean 30-50% off, now it's 20% factor in the fact you have made X # of payments with vertually all of that being intrest whoever owns this note is loosing little or nothing. By all means go for the short sale and don't feel bad about it. Its far better than a foreclosure.

Hey Flipper

That is very noble thing to offer someone you don't even know. I read your blogs on bulk REO's as well. There is not much in RE you don't know about is there? :rock: I'm looking forward to reading what you put out there.

loansafe is an excellent resource for anyone facing foreclosure.

Ive had success disputing the debt itself. Many of these notes have been sold so many times no one knows who has the original documentation. They can't foreclose without it if you request it.

Real nice of this lady to come back to the thread and thank everyone for the time they put into helping her.