Ruthless People?

HI!

We listed our home for sale July 2009 with one agent with 4 total showings and 3 open houses with ZERO attendees. (lovely, eh…). We re-listed with her as of Feb 1, 2010==but as I learned two weeks ago she did NOT receive the paperwork (what the?…..) and has NOT listed the house since Feb 1, 2010.

I called mortgage holder in January-EverHome Mortgage- and asked what to do. Was told that I was NOT a candidate for loss mitigation since I was current on my payments, the only way to get attention is to be late on payments, “Although I’m not telling you NOT to pay your mortgage.”

Right.

So we stopped paying.

Three months behind, foreclosure notice sent with payment four. Paid it, and got the financial package paperwork to move forward with deed in lieu, short sale–something.

Found a new agent last week, signed him and he has shown the property four times in the last week including a possible rental. There is ONE interested family looking to initially offer 250,000 on the home and our mortgage is 277,900.

Ok, so now do we accept the short sale and go through that process with Everhome and take the credit hit, and request the full release from extra debt? Or do we take out a 40,000 personal loan (if we can even get one….) to cover the difference?

Will it STILL show as short sale if we bring the $$ to the table to cover the difference? What if we accept the 250,000 from the buyers and pay the difference?

Sharon

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Hi Sharon,

It will not be a short sale if you “bring (all of) the $$ to the table to cover the difference”.  If you are paying other bills on time and/or have the financial means to do so then it is likely that EverHome (or the mortgage insurer if applicable) will condition the approval of the short sale on your signature of a promissory note for the difference – and in that scenario, it will still be a short sale.

Lenders call what you’ve described as ‘Ruthless Default’.  Borrowers call it ‘Strategic Default’.   What I call it doesn’t matter.  What matters is that ‘congrats you’ve been approved for a $40k signature loan from EverHome’ which begs the question: is that a good thing?

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.