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We rented our home since we were unable to sell in this market. What do we do?

I'm active duty military and currently serve at a different location. I bought my home in Las vegas in 2004, with the help of the VA (30yr fix). Since relocating in 2009 I have not been able to sell so we have been renting. We want to sell but we are looking at a 50K-70K lost. What are our options? We have no desire to return to Las Vegas, and we grow weary of handling our home as a rental. My next assignment may be overseas and I will not be able to maintain two homes. Can a bank re-appraise a home to adjust for current market value? How will a short sell harm me finacially in the long run? I really appreciate your advise.
  • March 02 2011 - North Las Vegas
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Answers (7)

You really need to get with your cpa or financial advisor as well as call your lender and the va and get with your rep as there are usually options for military active on duty overseas, etc.

You could ask about loan mods, etc do a lot of cking with the proper people at your bank and the VA before making a descision.

If you do a short sale, there can be consequences as well, your VA rep can explain some of it to you as well.

And as others mentioned, you may want to keep renting it out if you are not taking too much of a monthly loss.

Good Luck!
  • March 04 2011
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Dotti I apologize when I said NO lender will do a loan for someone with a short sale with less then 2 years seasoning.  I stand corrected and am sorry.  With 30-40% down or more I am sure a private lender would lend on the right home...but not a Fannie Mae, Freddie Mac, FHA, VA or USDA lender.  I assume this is what you are talking about for a loan.    

One last thing about the short sale.  It is more difficult when the home is not your primary and you may have to pay tax on the "forgiven" amount.  So say the lender takes $30,000 less than what you owe.....you will have to pay tax to the IRS on that money.  So to answer your question Ammo Professor, a short sale can cause you harm come IRS time.   

 
  • March 04 2011
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Jason Anger- If the seller keeps current on ALL Payments and HOA's he will not have late payments on his credit, Yes his Credit score will be better.  A short sale is a short sale but the credit score is the ultimate factor on getting the loan.  As Far as lenders in Nevada I have atleast 1 lender that will do loans for previous short sale clients within a few months of thier short sale if there are no late payments, they have relocated to a different area or their finacial situation has changed  and they have the funds to pay the new loan.

I do agree with Dan that your Jag Officer should be able to provide you with the legal help you need.
  • March 04 2011
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I have seen mentioned a few times that the military has some program to help those who are transferred with this kind of situation. Ask your JAG if they know about this. It may or may not be true but you lose nothing by asking.
  • March 04 2011
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Dottie is completely wrong.  A short sale on your credit is what it is.....it is not less of a hit if it was due to any certain reason.  The credit bureaus do not distinguish.  Also, I know of NO Lender that will give you a new loan 1-3 months after a short sale (regardless if you paid on time or not).  Most loans requires 3 or more years as they treat a short sale like a forclosure (again "even" if you paid your payments on time). 
Cami is right on the ball.  I would look into property management and keep the property as a rental.  Even if you lose say $200 to $300 a month that loss is tax deductable (SCHEDULE E) and the tax savings will help limit the blow.  There is no "perfect" answer here as we do not know your financial situation.  I am sorry to step on your toes Dottie but what you know of finane life after a short sale is way off and could really screw someone if they sold thinking they could get a loan 1-3 months after a short sale........good luck. 
  • March 04 2011
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Actually if you keep current on all of your payments including HOA dues you can short sell your home because of the relocation and you will not take as big of a hit on your credit.  Some lenders are allowing new loans within 1 to 3 months of short selling your home if you stay current. The VA is slightly different. As a veteran myself, I would be more concerned about your ability to get a New VA loan in the future.  I would check with your current mortgage company and see what options you have. Maybe they will reduce mortgage, do a loan modification or they may even recommend short selling. You can also go to the following link for more info straight from the VA. http://www.benefits.va.gov/homeloans/paytrbl.asp
 It is always recommended to speak with an attorney or financial consultant before short selling your home.
  • March 03 2011
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A short sale can hinder your chances to obtain a mortgage for 18 months to 7 years in the future. 

Another option you have would be to find a reputable property management service in the Las Vegas area.  A local Realtor can recommend one.  They would get a percentage of each months rent or a pre determined flat rate depend on your contract with them.  Then you can wait several years to see what happens to the Las Vegas market before trying to sell again or deciding it is best to take a different route.

Best of Luck!
  • March 03 2011
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