..

Did you think about loan modification? it maybe good, but I know it is very long and hard process.
sorry about your financial stress.
Alla

All I know is that a short sale does less damage to your credit, but still messes it up. Also, if your property sells for less than you owe, you owe the difference.  Defaulting on that loan is the same as defaulting on a regular house loan. Also, short sales can take a long time to complete unless you have a buyer already lined up.

Hugs,
Ratkity

 Tara
I had to do this when I went through a nasty custody battle with my ex.  It was about 15 years ago, before the housing crisis, though, so I dont know if the process has changed.

I had a first and second mortgage on my house in Florida.   I was having all kind of financial issues because of the idiot ex husband, and so I did a short sale.  

Both lenders required me to fill out a complete financial package.  It's not good enough just to say you cant pay, you have to prove your income and expenses before they will approve a short sale.  Then since I had both mortgages, both had to agree on what portion they would take.

I ended up shorting on my primary loan by about $20K, which they wrote off, and shorting on my second mortgage by about $11K, which they made me pay back.  The second mortgage company had my sign an unsecured loan for the $11K.  The balance was much more, the $11K was what we settled on after getting an attorney.

I was also advised to stop paying my mortgage, that it's just throwing good money after bad - and you're likely to need that money to move and secure a new place to live.

Again, this was awhile ago, it could be different now.  Sorry you're going through this.  On the bright side, we rented for about a year and then bought a home. The interest rate on that house was high, but we had to start somewhere.  Within 2 years my credit score was back over 700 and I could have my pick of mortgage loans again.

There's a "thing" that goes on with short sales where people get a family member to be the new buyer and that person rents it back or sells it to the defaulting owner.

I don't know if someone has made that illegal, but I know it's done.

Do not know if rules vary by state or not. I imagine they do. Bonnie is a realtor and she might be able to shed some light on it for you.

http://www.obesityhelp.com/member/stratfordstar/

Good luck, has to be a hard decision.

 I don't know much about them but my friend who bought a house around same time as mine bought one and it took forever. I thought a new law had went into effect to make them easier on seller and buyer but I could be wrong. A good site to go ask is creditboards.com and look in the mortgage forum. There are some realtors there as well as loan officers who answer pretty much any/all housing related questions and there is also many other sub forums that have to do with what it would do to your credit. It is free to join and has helped me raise my credit score. Also you might want to try myfico.com forum boards. They have a lot less postings but you can find answers there as well. 

Tara,

Sorry for your struggles.  I have a house I tried to sell the "regular" way for 8 months and I couldn't GIVE it away.  I finally rented it which is already a nightmare.

I wish you much luck.  This economy is just hurting so many good hard working people.  I have a friend who lost the home she raised her children in.  She lived in it for over 20 years and lost it to foreclosure.  That was 3 years ago and they still don't have employment and are living with relatives.  These are people MY age who worked hard and paid taxes there whole lives.  It just makes me miserable.

Again, good luck sweetie.

~Becky

 I absolutely can commiserate with you. My husband was laid off in 2006, had to take a HUGE paycut when he did find a new job. Insurance sucked. No pay raises. But we were scraping by. I was working, but then I got laid off. Then I got sick. Then we were drowning in medical bills. We had trouble with our mortgage and was able to modify the loan, but it wasn't enough. We scraped by a while longer. Tried to modify the loan a second time, but our mortgage company kept dragging it out. Then they denied the modification. That was three months ago and we're still in our house.

Now, in my situation, things have gotten to the point where we are having to file a chapter seven bankruptcy. I am just sickened by this. Two years ago, we had a credit score of 775. Now? Who knows what it is. Just know that you are not alone. Many, many people are struggling, and many, many people are having to start over. 


There is the Home Affordable Foreclosure Alternative (HAFA) program. I don't know much about it. We couldn't participate because we were given only like two weeks after receiving notification that our modification was denied before we could be considered for this program. The upside of HAFA is that you get up $3,000 relocation money, and there is a set time limit on how long the house will sit on the market. The downside is that you still have to make a mortgage payment during the short sale and there may be tax consequences. 

www.makinghomeaffordable.gov has more information. Just click on the "exit gracefully" link. 

You absolutely MUST go to this website: http://www.nolo.com/legal-encyclopedia/foreclosure/

Lots and lots of info about foreclosure here. It walks you through all kinds of different scenarios and chooses you have before you. 

Good luck. I know this sucks.

Lynda