WHY a Short Sale?? I want to surrender.

[lolie]

O.K. we just had our second meeting with our attorney. Decided to go ahead with Chapter 7, but when I mentioned we want to surrender our home he would cover over other things first. Then when we got to filling out the paperwork, he put down Short Sale. I don't get it! I said surrender.

Is it because in order to qualify for a Chapter 7 and pass the means test, I need to have my mortgage included and if it were rent instead I wouldn't pass, therefore I have to do a Short Sale? I'm confused. Either way the bank is going to get the same, right?

Help me!! I don't want to do a Short Sale. We have over 300 homes in our neighborhood alone that are trying a Short Sale. I don't want to have to try and sell our home. Do I have any other options? Is this just a starting tactic in order to get a surrender? Does the bank have to come back and agree and if not then what happens?

We had a rushed meeting with our attorney today and I didn't get a chance to ask all these questions. Please help.

[AngelinaCatHub]

OK, on the surface, only my opinion. Go with the lawyer. You will not be thrown out of your house now or later as long as you "pay through". They want no more empty houses. They want your money.

It may be a ploy as you suggested. Ask him next meeting, but do not worry about it. DO NOT reaffirm as we know not what is in our economic future. Have you ever seen such a mixed up economy we now have? Stay safe. "Hub

[JackBondLove]

Isn't a short sale the same thing as the bank converting the difference of the net sales price and the mortgage balance into an unsecured loan? Then you would simply have that unsecured loan which would be discharged in Chapter 7.

[lolie]

Not worried about being thrown out of our house, in fact, I wouldn't mind as long as there isn't a deficiency. I just don't want to have to go the route of a short sale. I just wanted to surrender the house and be done with it. Never late or behind on payments, just extremely underwater. I don't understand why we can't surrender and that we have to do a short sale. Just frustrated. Thanks for your advice. I will be calling my attorney tomorrow for some answers. I was just hoping someone out there would know why.

[lolie]

JackBondLove,
My thought exactly. Same thing, yet why make us suffer through a short sale that will also last forever, in our neighborhood anyway. (Like I said, over 300 houses in pre-foreclosure or short sales). By the way, I live in California.

On a side note, I just heard today from my dad (ex real estate agent), that the realtors are having troubles with short sales going through because banks are trying to pass on responsibilities of deficiencies of the past owners to the buyers and the short sales transactions are dropping like flies.