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I have a 80/20 mortgage I still owe $172,000 on my house my house is worth about 162,000.

I'm relocating and need to sell, is there any instances where something could be worked out with the second mortgage company to proceed to sell rather than foreclose, in and upside down home?  Please explain options, if any?
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May 17 2010 - Spring
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It sounds like you need to do a short sale.  how do you know that your house is worth only 162K?  did you have an appraisal done or did you get a Realtor to do a CMA on your house?

Is there a possibility of renting your house where you get enough to pay for the monthly mortgage until your market recovers?

Naima
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May 17 2010
In the lower left hand corner there's a date when the original post was written. This one is almost a year old. By now, this situation has been resolved.
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January 31 2011
It sounds like you are in a short sale situation.  The term "short sale" refers to a home being sold for less that what is owed to the lender(s). A short sale is not a foreclosure, but it would be recorded on your credit report. In a short sale situation, your real estate agent would solicit offers for lower than the loan amount and present to the lender(s) for their approval. There is a lot of work that goes into a short sale and they aren't always easy to finalize. Also, if the home isn't your homestead then you may be responsible to pay taxes for the amount of loss on your loan.

I would seek the advice of an agent that has a track record of success with short sale listings and even a CPA to know your full financial liability.

Good luck with your home sale and if you would like to learn more details about the short sale process, please feel free to contact me anytime.
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January 31 2011
In TX they can come back after you for a defiency judgement unless you have a non-recourse loan. That would be in your paperwork you received from your lender. I am not an attorney and don't pretend to be. In short sales there are three people vital to its success: 1) an experienced short sale Realtor, 2) a real estate attorney, 3) an accountant. It's best to talk to a Realtor or an attorney about your options. Or you can contact a HUD counselor and they can provide you with muched needed information. I am here to help if you need it.
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May 18 2010
Profile picture for VegasResident
You may owe $172,000 but it is going to cost you more than that to get out of it. There are closing costs and commissions. The commission alone could add $6500. You would probably have to sell it for over $180,000 to account for everything.

Seconds have to be paid off at the sale of the house. They are not like an unsecured loan. That being said.."working things out" with your second means paying it off and they will tell you that.

If you allow a foreclosure and live in a state where they can come after you (recourse state), the second has years to do so as opposed to months like the first. What that means is that the second mortgage company could sell the debt to a collection agency after the foreclosure and then a few years down the road a collection agency could come after you and garnish your wages for the second if everything was not recovered in the foreclosure sale.

Be very careful about second mortgages.
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May 18 2010

You could have a few options available to you in this situation. However, each situation is unique. It sounds like you need to do a short sale. If the second is with the same lender, you should be fine. If it is with another lender, it gets trickier. It is crucial that you work with an agent w/experience in matters like this. If you click on my picture, you can see my profile. I have been doing short sales for several years and have the training/certifications in short sales/loan mods. Contact me via my profile so we can talk.

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May 18 2010
I would suggest speaking with a Realtor who has experience working with the banks. In today's world anything is negotiable depending on the lender.
Are you currently behind on your payments or are you current? The reason for selling also plays a role. If you would like more specific information email me [contact info removed by moderator]
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May 17 2010
 
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