Repayment of short sale deficit - what were your terms?

[Golf4food]

Florida is one of those states where the bank/credit union can come after you for the difference on a short sale. We've tried talking to the CU about what sort of terms the repayment would be but they refuse to tell us anything unless they actually have an offer on the table that they accept. However, if the repayment is going to be as bad or worse than the current payments it makes more sense to just rent the place even at a small loss rather than have a horrible repayment to deal with - losing a few hundred per month on the rental is probably better than losing $1,000 per month on the repayment, etc.

So does anyone have experience with repayment of a short sale difference? What sort of loan did the bank setup? Interest rate?

(ight now the market is down so far that our old house is probably at least $50,000 underwater. We aren't behind on payments on anything, but we'd sure like to get away from it, especially to not have the taxes or insurance on it. Payment is currently around $1,280 per mo, we might be able to get $850 rental out of it. But if the repayment on the $50K shortage is going to be $1,000 per month it still makes more sense to rent, right?)

 

[Tampa Mousekeeter]

As a fellow Floridian I am curious why you want to walk away? Granted, homes have lost value depending when you bought, but a $1,200 mortgage is not an enormous amount and where would you live and for how much?....I wasn't even aware you could work out a payment plan on a short sale.

 

[neatokimmo]

I am confused too. How much will your new apartment rent for? Won't it also cost you $850 to rent something suitable?

And if you are leaving the state, how will you manage an out of town rental?

You also have to work in the costs of things that they break and ruin.

If you aren't behind and can afford the payments why would you short sale?

 

[bumbershoot]

I too am confused.

Would you want to stay in the house if you weren't "under water"? If so, why leave?

You agreed to pay a certain price. That price was fine at the time, otherwise you wouldn't/couldn't have agreed to it. So who cares what the current value is? Isn't it still valuable to you when you walk in the door, regardless of what the tax rolls say?

Just ignore what the house's "value" is. What's important is that you bought the house because you liked it (maybe even loved it? but I'm a renter and naive and I feel that people buy homes because they LOVE them, because I believe in buying a house and STAYING there.), you can afford the mortgage, and you were happy with the price when you bought it.

Don't bother renting, just hang out! A house is a place to live in. Not a wealth-builder (despite what people have fed us for years).

 

[BBGirl]

I believe the property in question is a rental and not the homeowners primary res. That is how I read it anyway.

 

[angelat]

I believe the property in question is a rental and not the homeowners primary res. That is how I read it anyway.

No, I think they are saying that they either do a short sale and pay (by the OPs estimation) $1000/mo for the difference; or they move out, find a new place and rent the old place and only pay an approximate $400 difference.

Yes, renting sounds cheaper if you don't include all the maintenance costs as someone else pointed out. But again, why do you want to sell?? Are you unhappy with the neighborhood? Did you get a job offer somewhere else?

Help us to understand a little better.

 

[Lisa loves Pooh]

We are further upside down than you are...but that is our doing with the 2nd mortgage. Short sale wasn't even an option. Our lender would not begin to consider it until you are behind...and then they would likely lose their interest if they agreed to the short sale given the actual value of our home to a buyer. They sold our first but own the second and they would have to say sure...no problem, leave us high and dry. Won't happen.

Anyway---our renter just about covers the first mortgage leavnf us responsible to pay for our stupidity. We rented at a rock bottom price---but we needed a lock quickly and we needed understanding renters not minding to fix a few things up. We got a perfect match.

We are not looking to profit, but we will help maintain the home as on the other end of eventually selling--we want it pristine and ready. We hit the jackpot on the renters we got who will care for the home as though it were their own investment.

In the end, our home is still up in value---the deficit is solely due to using home equity to consolidate loans.

Anyway---you can try to do a short sale without recourse. Just because a lender CAN go after you in Florida for the difference doesn't mean you can't try to negotiate the terms so that they can't.

If you can pay for the home, no sense in taking the credit ding I'd you don't have to. If you can afford to hold out, then do that before messing with your credit score over an inconvenience.

We did buy a new home as we wouldn't fit in a rental that fit our budget. We just asked our lender to approve us so that we could own two homes withot any contigincencies for sale or conditions for rental.

As for moving---unless you have to, I wouldn't do it at all.

 

[DisneyNutMic]

It's my understanding that you can't be offered a short sale until you are both behind on the payments and had the home listed for sale for at least 90 days.

 

[Golf4food]

To clarify we had to move a year and a half ago and have been making payments on both properties, trying to sell the old one (zero offers) and have been trying to rent it for around 6 months as well with no takers so far. (Nice place, just small and only one bath.)

We have a house, have made all payments on everything for a year and half, but can't keep doing so indefinitely. The loan on the old house is with a local credit union and they've already said they DO go after the difference and we'll have to repay the deficit. I'm just trying to get an idea if anyone else has done so and what kind of terms you got. Forget advice about anything else - it is irrelevent.

But if the cost of paying back the repayment of the deficit (assuming they even approve a short sale amount) is going to be significantly higher than what we would lose renting the old place out for less than the payments, it makes more sense to hold onto it and rent it out until the market recovers a little more. Does that help?

 

[Nayan]

A short sale in Florida is a nightmare. You cannot 'come to terms' on an agreement and you cannot short sale if you aren't behind. What they can (and do!) do is take you to court, sue for the amount you owe and then you pay on their terms. They can garnish your wages also. Whatever they want you to pay, whether you can afford it or not, is what you'll pay and they'll go after you to get it. I'd hang on as long as possible.

 

[rparmfamily]

What about doing a loan mod on the FL property? Would a reduction in rate or monthly payment help?

And I hear ya,...our home in FL has been unrented for 9 MONTHS...I have nothing nice to say about it. GRRRRRRRRR (yes, while I pay rent too here in HI)

 

[Golf4food]

What about doing a loan mod on the FL property? Would a reduction in rate or monthly payment help?

And I hear ya,...our home in FL has been unrented for 9 MONTHS...I have nothing nice to say about it. GRRRRRRRRR (yes, while I pay rent too here in HI)

It is my understanding that they won't modify any mortgage that is not your home. Since we no longer live in that property I doubt they'd do anything for it.