chapter 7 and a home short sale

[nevada]

hi all,

I have been in the process of doing a short sale on the house i am in. i have a few questions i would like some clarification on. any help is appreciated.

the home was surrendered in the chapter 7 bk. I had a 1st and a 2nd on the home. they bank has not started foreclosure proceedings. the BK was discharged last october. i was just going to wait until i was asked to vacate but a friend who is a realtor said he could short sell the house and extend my stay on the property until it closed. I did not see a problem with that so i said sure.

The holder of the 2nd has not released their lien on the property holding the process up. they have claimed that they can come after me for the money although they were included in my BK. I was asked to contact the lawyer who handled my BK and ask them about it.

i was informed that if i sold the home under a short sale that i would effectively remove the house from the BK and would then become responsible for any difference between the loan amount and what the house sells for to include the 2nd.

well obviously i do not want to do that so i told the realtor to kill the deal. he came back after a few days stating that he did not understand how i could be held responsible for the loan difference if it was relieved under the BK. he had spoken to two other lawyers who said i could not be. so there is some confusion for sure.

I have also qualified for the HAFA program and i was told by the Realtor that in the HAFA guidelines it states that the homeowner cannot be held responsible as well. So we are supposed to sit down with his lawyer tomorrow and go over the whole deal. Ultimately it does not matter to me if the place sells or not. Its really just a way for me to save up for when I have to relocate. Also if you qualify for the HAFA program you receive $3000 at closing to help move, etc.

Can I be held accountable for the load difference if the house is sold under a short sale? I would appreciate any and all input on this as I am really confused.

[helpmeout]

Your friend, who is a real estate agent, wants the commission from the short sale. Your friend is also dead wrong about being able to extend your stay with a short sale. The short sale could result in the house being sold before the bank has even started the foreclosure process. Which would shorten your stay.

Personally, I would tell your friend no to the short sale. You don't see the point in all of the extra work (keeping the house spotless is a lot of work) when you aren't going to get any money from the sell. About the only people benefiting from a short sale is the real estate agent and the bank. Your friend gets money and the bank saves money on the foreclosure process. I'm simply not seeing the benefit to you.

[nevada]

benefit from sale

hi,

actually the benefit is that it i would get $3000 under the HAFA program from the short sale. if i just walked or let it get foreclosed on then i would not. in Nevada you just have to give a 3 day notice. so whether i would get more time in the house or not is probably up in the air. at this point i think it has extended my stay as i have been in the home since Jan of 2010 when i started the process of trying to mod the loan, etc and then eventually filing.

[despritfreya]

You did not reaffirm either mortgage. Whether you simply walk away or persuade the 2nd to take the deal, so long as you do not sign a promissory note for the amount not paid (and the lender better not try to get you to do that as such would be a violation of your discharge), the debt was discharged and there is nothing either lender can do to collect.

I agree with helpmeout. Short sales are a complete waste of time and energy. You think you will qualify for the $3k. Don't count on it. Getting your 2nd to agree to release the lien is going to be like pulling teeth and not worth the piddly $3k IF you qualify.

IMHO you are better off walking away. Chances are that the lender, when it forecloses, is going to offer you "cash for keys" which could be more than $3k. You should look into that "unofficial program" as it relates to foreclosures in your State. In mine, I have seen payments as high as $5k.

Des.