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Answers (3)
- Maureen Francis _MI_
- Contributions:24
Banks typically start negotiating saying you must cover the shortfall. That is part of the negotiating the agent does with the bank. Your financial statement will show that you do not have the assets to repay. Packaging and negotiating a short sale is a good option for you, but it has to be done well. Make sure you are working with an agent who knows this process and has done it successfully. If you would like to call me, I would be happy to talk to you about it further. I am in Birmingham.
- Drew Sygit, "Drew Sygit"
- Contributions:13
Michael Emery had a decent post, but was in error about getting a mortgage after bankruptcy. FNMA/FHLMC require 4 years, FHA only 2.
In a short sale, lender forgives difference between what you owe and what property sells for. You will need an EXPERIENCED agent to assist with this. Contact me if you need assistance with finding one.
Also, you have to worry about lender sending 1099 for forgiven debt and deficiency judgment. 1099 should be covered by 2007 law, but check with CPA. Deficiency judgment you will want negotiated away or could force you into bankruptcy. Check with an attorney.
- Michael Emery, "MikeEmery"
- Contributions:7298
Bankruptcy isn't the only option. Talk to your lender before doing anything. They might be willing to forgive part or all of the difference between a possible sale price and what is owed on the loan. They might also be willing to write a loan on part or all the difference of the shortfall between sale price and the loan amount.
If you file for bankruptcy (which has gotten alot harder and more expensive from what I have read) you will be unable to purchase a new home most likely until the bankruptcy is discharged, which I believe is 7 years. Your only hope for buying a home at that point would be a contract for deed, most likely at a higher than average interest rate.
If you file for bankruptcy (which has gotten alot harder and more expensive from what I have read) you will be unable to purchase a new home most likely until the bankruptcy is discharged, which I believe is 7 years. Your only hope for buying a home at that point would be a contract for deed, most likely at a higher than average interest rate.
Is a short-sale 'shortfall' discharged in bankruptcy?
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