Short Sale and New Home

[frankies_mom]

Just looking for some advice because we do not know the best way to go. Our condo is about 80k underwater. We both did a 7 about 4 years ago now and we did everything to save our home. We finally did but now we are so far underwater we don't see us even breaking even anytime in the future.

We have two children and our ultimate goal is to be able to buy a modest home someday. Should we short sale and then save and wait out however long it would take for us to qualify for a mortgage again? A mortgage specialist told me that if you are current on your home and do a short sale then you are eligble for a mortgage right away. But to me something doesn't sound right. Why would the bank let you short sale if you are current?

Any advice? Do we short sale and then wait or try to wait out the market to break even (whenever that may be)?

[HHM]

"right away" is not exactly accurate. If you do a short sale, but remain current, the waiting period is 1 year (short of special circumstances).

Your suspicion is correct, it is very difficult to get a bank to sign off on a short sale if you are current on payments. Not impossible, but unlikely. The only time I have seen it work is if the homeowner has a demonstrable hardship, e.g. the homeowner is moving out of state for a job.

If you are that upside down, you should get out of the house. The only benefit to you of doing a short sale is that you might get out of it sooner than if you let the house go to foreclosure. Personally, I wouldn't waste my time with the short sale, but that is up to you. If the bank will force you to default to do a short sale, might as well do a foreclosure.

[tobee43]

i don't know how much things have changed out there as far as the banks attitude about short sales.

i know we attempted it and it had to be approved by one person to actually go into the short sale department, where they had to get in touch with the realtor or was it the realtor had to get in touch with the bank. submit all or any offers to the short sale department where the contract was or was not approved. then if by the luck of the draw it was approved it would take over 7 months to close and most of the buyers ended up walking away.

i hope it's different now and you will be more successful with your attempt than we were with ours.

[Floridagail]

Both my sisters are buying shortsales here in Tampa Bay area, both started February with offer. Both have been nightmares, Left does not know what the right is doing. Delays, My sister M( the bank made the shortseller, pay 5000 cash at closing, they wanted the appliances but were forced to leave, then because the closing was delayed forced to pay interest of 900) My sister was hit with a neg fee 3000 to the attorney handling the shortsale for bank. She did close finally last week.
My sister J, is buying a shortsale from a investor and is having to pay neg fee 1300, I cannot wait to see what the shortsellers had to pay after her closing this friday. We are glad now , we did not try to shortsell. They still have not taken our house now 24 months.

[tobee43]

Both my sisters are buying shortsales here in Tampa Bay area, both started February with offer. Both have been nightmares, Left does not know what the right is doing. Delays, My sister M( the bank made the shortseller, pay 5000 cash at closing, they wanted the appliances but were forced to leave, then because the closing was delayed forced to pay interest of 900) My sister was hit with a neg fee 3000 to the attorney handling the shortsale for bank. She did close finally last week.
My sister J, is buying a shortsale from a investor and is having to pay neg fee 1300, I cannot wait to see what the shortsellers had to pay after her closing this friday. We are glad now , we did not try to shortsell. They still have not taken our house now 24 months.

i know when we were first looking to buy here in florida we put a few bids out on the shortsales...it was an absolutely MESS...none were closing at all. so, in one way, i'm so glad your sister is actually going to close!! our other house still sits in another state after over 4 years, no attempts for any short sale by the banks, and actually, never been on a list to even foreclose.

we stopped looking for shortsales in florida, and had to move on quickly as that was the path for us to get another home after bk.