Upside Down Mortgage

Posts Tagged ‘Short’

Loss Mitigation Short Sales

Question: Confused about selling a home for less than our mortgage amount?

We owe $35M on a rental property that we purchased for $40M a few years ago. The area in which the property is located has gone down the toilet for the past few years and the home is now worth around $15-$17M. We received an offer of $15M for the home and we need to take it. We can't keep a tenant in the property any longer because of the crime rate. The property has been robbed/vandalized 3 times already. We contacted our mortgage company to see if we could pay them the $15M from the closing, but then get an unsecured loan from them to continue paying the balance. The immediately sent us to the loss mitigations dept and started talking short sale. I didn't even know what that meant until I googled it online. If we were not asking them to write off/forgive the balance, why are they talking short sale? If they can't lend us the balance, unsecured, why didn't they just say so and hope that we could get an unsecured loan elsewhere? I'm so confused...

Answer: For them to approve a relase of the lien and to convert the loan from a secured mortgage to an unsecured note they'll need to get an approval. It is a short payoff to release the lien, even if you are paying off the remainder, so the loss mitigation department is the logical department to handle it.

Most short sales they do forgive the remainder but on some they take a note, and you fall into the latter group. Just cooperate with them and you'll be fine.

Good luck.

Loss Mitigation and Short Sale Secrets

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Mortgage Forgiveness Short Sale

Question: If i short-sale my house for $200K and i owe $425K on my mortgage do i still have to pay the difference?

My mortgage is $325k 1st loan & $107k heloc. Do i still have to pay the difference to my lender? Can they go after me even if i qualify for debt forgiveness?

Answer: A short sale requires permission of the lender, otherwise you have defaulted on your loan, so without their permission you would have to pay the difference.

The good news is the IRS just ruled that you are not liable for taxes on the amount of the loan forgiven by your lender.

New Tax Rules for Short Sales - Foreclosures

upside down mortgage short sale

Question: If I stop making my mortgage payment, other than a hit on my credit what can happen to me?

We want out of the house that we are in and we want to move. We will never get out of our house due to the upside down market. If we walk or take a short sale what could possibly happen. My credit would be shot for a few years but my husband could put the new house in his name. What do you think?

Answer: Why did you buy a house you couldn't afford to begin with?

How Securitized Mortgage Loans Affect Short Sale Negotiation...