Have equity, but I'm still facing foreclosure

My problem is that I just lost my job and a small (but expensive) medical emergency took my remaining cash. While I have a couple of hundred thousand dollars in equity, I'm behind in my mortgage payments. I need a quick infusion of cash to hold me over until at least one of these houses sells or I get employment. Because I'm out of work, the bank won't talk to me about a loan. My FICO was over 750 but I can't imagine what it is now.

I'm two months behind on one and three on the other and really want to avoid foreclosure. Does anyone know of any short term lenders or other solutions to get me through this short term problem?

Edited: 06/26/2010 at 10:16AM

J Scott

Real Estate Investor · Atlanta, Georgia

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Icon_minipost Oct 27 '09, 09:51 PM

Why don't you just list the house that has the most equity for a price that will sell QUICKLY.

Get out of the house in the next few weeks, and use the cash you generate to hold you over on the others.

There's no reason to have a house that has equity go into foreclosure...

Edited: 06/26/2010 at 10:16AM

Jon Holdman

Real Estate Investor · Denver, Colorado

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Icon_minipost Oct 27 '09, 10:04 PM

Yes, J Scott's exactly right. You're not going to get a loan because you have no income. Plus you now have the late payments on your credit report, pretty much ensuring no lender will give you a loan. Get any one of these sold and maybe you can have enough cash to hold on until you get a new job. I'd get the third one listed, too. I'd price them very agressively. Even if you get a contract within 30 days, which is difficult to do, you'll have another 30-45 days before you close. So, most likely at least two more missed payments on all of them. I'd ask the listing agent "what price do I need to use to get a contract this weekend". I'd also only do 90 day listing agreements, or maybe even 30 day agreements. You just don't have time to let them set and wait for a better price.

Edited: 06/26/2010 at 10:16AM

Jon Holdman, Flying Phoenix LLC

Nick J.

SFR Investor · Scottsdale, Arizona

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Icon_minipost Oct 27 '09, 10:07 PM

I can't disagree with the others.

Sell the first two, live in the third(no mortgage house) and start over.

Like it's been said, sell at a price that you'll get an offer this weekend. Also make sure your listing agent does more to sell your house than just 'list' it.

Edited: 06/26/2010 at 10:16AM

James Harkness

Real Estate Lender · Philadelphia, Pennsylvania

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Icon_minipost Oct 27 '09, 10:13 PM

Foreclosures in PA take about 9 months on average from start to finish. You have time. You may also want to try modifying your mortgages (once a modification is put in place, the foreclosure process is stopped, and would have to be started all over again if you were to default again)

Obviously selling a home would be the best bet though.

Edited: 06/26/2010 at 10:16AM

Beryl M.

Residential Real Estate Agent · Rockville, Maryland

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Icon_minipost Oct 27 '09, 10:37 PM

I agree with the others. Also, could you get a friend or family member to loan you some money to help you get by and agree to pay them back (with interest if necessary) when the first house sells. Show them how much equity you have in it and then price and market it agressively.

Edited: 06/26/2010 at 10:16AM by Beryl M.

Dave Clifton

Real Estate Investor · Pittsburgh, PA

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Icon_minipost Oct 27 '09, 11:04 PM

Originally posted by Moimeme

I agree with the others. Also, could you get a friend or family member to loan you some money to help you get by and agree to pay them back (with interest if necessary) when the first house sells. Show them how much equity you have in it and then price and market it agressively.

First of all, thanks to everyone for the advice...I know that I have to sell and am trying.

Moimeme, that's what I was looking for...A short term loan but I've always been opposed to asking friends or family. Maybe I need to get over that pride!
I'm more than happy to pay interest...Even high interest for a short term, but I sure would rather deal with a private investor that go to friends or family.

Edited: 06/26/2010 at 10:16AM

Rodolphe Brun

Real Estate Investor · Pittsburg, Pennsylvania

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Icon_minipost Oct 29 '09, 10:47 PM

the problem with trying to delay with a loan modification is: The bank will not modify if you don't have a job.
Contact your mortgage company and tell them you are selling your properties.
That will give you more time if you stay in contact with them.

Edited: 06/26/2010 at 10:18AM

Thomas Mynar

Real Estate Investor · Lockhart, Texas

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Icon_minipost Oct 30 '09, 06:43 AM

I have never used them, but try www,sellyourhousein7days.com

Edited: 06/26/2010 at 10:18AM

David Huttenmaier

Real Estate Investor · Leander, Texas

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Icon_minipost Oct 30 '09, 07:09 AM

I don't know what part of Pittsburgh your homes are in, but I did a quick search for median home prices and it seems that house #1 and #2 are at the upper end of properties. You may want to consider using owner financing to help sell the house #1 faster. Bank loans are so hard to get today, so owner financing will allow the sale to go quicker. The advantage to this is that you will be able to keep some of your equity and you will have cash flow to help pay the bills until you get another job. There are a number of investors who may be able to help you with this type of deal. Look on craiglist for "help stop foreclosure" and you may find one in your area.

Another option is to wholesale house #3 to an investor. If it is in good condition you should be able to get some cash to help catch up the other mortgages and protect your equity until you can sell house #1.

Edited: 06/26/2010 at 10:18AM

Thomas Mynar

Real Estate Investor · Lockhart, Texas

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Icon_minipost Oct 30 '09, 07:10 AM

Now I did use this one to sell my personal residence in 2005 in Houston, TX. I did it myself without an agent. You can find the book at a bookstore, How to Sell Your Home in 5 Days, by Bill Effros. He sold the licensing rights to George Cappony, who has www.5-daysale.com. That is what I used.

Edited: 06/26/2010 at 10:18AM

Steve Babiak

Real Estate Investor · Audubon, Pennsylvania

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Icon_minipost Oct 30 '09, 07:30 AM

James is correct about the PA foreclosure process taking about 9 months; those who are skilled at being delinquent can drag it out for years by taking advantage of various loopholes.

I agree with the post that said a loan mod is not an option without income.

It is just foolish to allow any house with equity to go to sheriff sale; at worst, you should try to sell for break even.

To get a quick sale, you might have to accept a significant discount off of the fair market value. Here is what you might expect if you sold the two higher valued properties with 10% and 20% discounts.

FMV=$640K .9*FMV=$576K .8*FMV=$512K
Subtract 6% for realtors and at least 1.5% for seller's share of transfer tax.
Since balance owed=$470K, with about $38K for that 7.5%, means that the .8*FMV is roughly the break even point.

FMV=$580K .9*FMV=$522K .8*FMV=$464K
Since balance owed=$340K, with about $35K for that 7.5%, means that the .8*FMV nets roughly $90K.

Looks like you can't let that first one go for less than 80% of the FMV that you gave.

Edited: 06/26/2010 at 10:18AM

Scott Hubbard

Rehabber · Tucson, Arizona

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Icon_minipost Oct 30 '09, 08:29 AM

Sell the two that are most marketable and I would even consider selling all three and downsize until you regain employment.

Forget trying to keep your favorite just have agressive pricing on the first perhaps at .85 percent or just above breakeven. Seek a listing agreement where the agent will list at a discount 2% with a buyer's coop at 3% and if she sells the first, you will offer her the second property with an option for the third.

Call your lender and let them know your experiencing a hardship and your listing the properties for sale.

The one problem with long foreclosure is it will eat up your equity as mounting late fees, legal costs will certainly take a chunk.

That is why I agree with others on being aggressive with pricing.... Not too mention the buying season is over.

Good luck!

Edited: 06/26/2010 at 10:18AM

Ofgift Gift

· Tucson, Arizona

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Icon_minipost Oct 30 '09, 11:05 AM

Originally posted by Thomas Mynar

Now I did use this one to sell my personal residence in 2005 in Houston, TX. I did it myself without an agent. You can find the book at a bookstore, How to Sell Your Home in 5 Days, by Bill Effros. He sold the licensing rights to George Cappony, who has www.5-daysale.com. That is what I used.

I too, used Bill Effros' book to sell my house myself. I've written a few detailed posts about it, one a few days ago.
He and George used to work together, but apparently Bill hasn't had anything to do with him, for a few years, and George is doing some things that Bill is not favorable to.
at any rate, there is a website by that name and an active forum that you can join through the website. I think it's a realistic way to sell your house(s) now, keeping in mind that your highest bid will likely be at least 20% below what you consider present market value.
I strongly suggest you look into it, and if you do go with an agent, consider doing a 5Day sale first, and keep the option open to do another even while listed. Some agents will apparently agree to end their contract for a few days, or allow the owner to sell themselves within parameters.
Do consider it. Owners are selling via Bill's 5day method.
Ofgift

Edited: 06/26/2010 at 10:19AM

Scott Hubbard

Rehabber · Tucson, Arizona

1025 posts
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Icon_minipost Oct 30 '09, 12:29 PM

Sell the two that are most marketable and I would even consider selling all three and downsize until you regain employment.

Forget trying to keep your favorite just have agressive pricing on the first perhaps at .85 percent or just above breakeven. Seek a listing agreement where the agent will list at a discount 2% with a buyer's coop at 3% and if she sells the first, you will offer her the second property with an option for the third.

Call your lender and let them know your experiencing a hardship and your listing the properties for sale.

The one problem with long foreclosure is it will eat up your equity as mounting late fees, legal costs will certainly take a chunk.

That is why I agree with others on being aggressive with pricing.... Not too mention the buying season is over.

Good luck!

PS Sorry Jon, must have double clicked.

Jason S.

Real Estate Investor · Upland, California

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Icon_minipost Oct 30 '09, 01:36 PM

Originally posted by Dave Clifton

I currently have three houses, two with mortgages.

Home #1 appraised at $640k just went on the market for $595k and mortgage of $470k.

Home #2 estimated value of $580, mortgage of 340k

Home #3 just listed (yesterday) at $79k, no mortgage.

My problem is that I just lost my job and a small (but expensive) medical emergency took my remaining cash. While I have a couple of hundred thousand dollars in equity, I'm behind in my mortgage payments. I need a quick infusion of cash to hold me over until at least one of these houses sells or I get employment. Because I'm out of work, the bank won't talk to me about a loan. My FICO was over 750 but I can't imagine what it is now.

I'm two months behind on one and three on the other and really want to avoid foreclosure. Does anyone know of any short term lenders or other solutions to get me through this short term problem?

It should be very simple to get a hard money loan for $30K+ from the 3rd home that is free and clear. It sounds like even $20K will carry you through this time. Contact me and I will point you in the proper direction... this is not a solicitation of services, just an offer to help point you in the right direction.

This way you can take the proper time to sell your properties for full market value.

Edited: 06/26/2010 at 10:19AM by Jason S.