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Answers (6)
- Bob Phillips, "BobPhillipsRE"
- Contributions:772
Hi Eric,
Of the answers you've received below, the two offered by "civilians" ( Non-Realtors.) are the most accurate, with Wetdawg's being the most thoroughly applicable to your situation.
The responses by the 3 agents could even be construed as potentially dangerous, or costly misinformation.
I could repeat Wetdawgs points, as many agents on Zillow are prone to do, but my suggestion is to simply read his/her response carefully.
Good luck in finding solutions - if I can be of assistance, my contact info is in my profile.
Of the answers you've received below, the two offered by "civilians" ( Non-Realtors.) are the most accurate, with Wetdawg's being the most thoroughly applicable to your situation.
The responses by the 3 agents could even be construed as potentially dangerous, or costly misinformation.
I could repeat Wetdawgs points, as many agents on Zillow are prone to do, but my suggestion is to simply read his/her response carefully.
Good luck in finding solutions - if I can be of assistance, my contact info is in my profile.
- NTETS, "Mr Caveat"
- Contributions:6436
@ joelie a short sale is *somewhat* better for your credit v foreclosure
@ robbie 2 people answered the q the day it was asked, why are you answering a 3 week old question?
@ robbie 2 people answered the q the day it was asked, why are you answering a 3 week old question?
- Robert Larsen, "Robert Larsen"
- Contributions:21
Yep, the lender eats the difference. However, if you're upside down on your home it is definitely the best option. What people are not realizing is that when it comes to banks choosing between a short sale or a foreclosure, they are more than happy to accomodate a short sale. They save a lot of money doing a short sale rather than having the property go back to the bank. Second mortgages, or lines of credit, are usually taking between $1000-$5000.
As for you credit, compared to going through a foreclosure, it does not even compare. Some banks are actually negotiating to get the short sale and the late payments taken off the client's credit report. Depending on the bank, they are also closing them rather quickly.
As for you credit, compared to going through a foreclosure, it does not even compare. Some banks are actually negotiating to get the short sale and the late payments taken off the client's credit report. Depending on the bank, they are also closing them rather quickly.
- Joelie Quezada, "joelieq"
- Contributions:10
- wetdawgs
- Contributions:26833
You are right, it is not good for your credit!
The second lender must agree to subordinate the loan to the first lender. They do not have to agree (and often don't because they usually end up with almost zilch).
What happens to the difference? If all the money is a primary loan for purchase of the house, the bank may forgive the debt and the IRS will forgive the income taxes normally due on the difference.
However, if you've ever refinanced taking equity out, or have a HELOC using equity, then only the money used towards the house has fed taxes forgiven If equity money was used towards something else (a car, a boat, credit card debts, college tuition, a collection of gnomes etc), then if that debt is forgiven you will still owe Federal (and perhaps state) taxes on the amount.
The second lender must agree to subordinate the loan to the first lender. They do not have to agree (and often don't because they usually end up with almost zilch).
What happens to the difference? If all the money is a primary loan for purchase of the house, the bank may forgive the debt and the IRS will forgive the income taxes normally due on the difference.
However, if you've ever refinanced taking equity out, or have a HELOC using equity, then only the money used towards the house has fed taxes forgiven If equity money was used towards something else (a car, a boat, credit card debts, college tuition, a collection of gnomes etc), then if that debt is forgiven you will still owe Federal (and perhaps state) taxes on the amount.
- Kelly Lacey, "kellylacey"
- Contributions:797
The lender eats the difference on a short sale. This is why the lender has to approve the short-sale.
In regards to the 2nd, again, the lender has to approve the short sale.
If you have 2 loans and you want to do a short-sale, good luck. Most 2nd lien holders will not approve this. Expect the process of approval to take many months.
If it gets approved and you do a short sale, your credit will be hit quite hard unless you work with the lenders on how they report it to the credit bureaus.
In regards to the 2nd, again, the lender has to approve the short sale.
If you have 2 loans and you want to do a short-sale, good luck. Most 2nd lien holders will not approve this. Expect the process of approval to take many months.
If it gets approved and you do a short sale, your credit will be hit quite hard unless you work with the lenders on how they report it to the credit bureaus.
If you short sale your house for less than it's worth, what happens to the remaining balance?
What happens to your second or home equity loan with another fnancial institution? Does that loan go with it, or do does that loan become unsecured and you have to renegotiate with the lendor of yor 2nd.
This is all not good for your credit is it?
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