Is Short Sale Possible?
Question: Hello, I am new to this board. We are currently in a Chapter 13 bankruptcy. We have NEVER been late with any payments (on anything except a Household loan, when we were told by our lawyer to stop paying them because we were going to sue them) but are among the hundreds of thousands of victims of Household Finance. You may be aware of the “settlement” they just made with 19 states over their alleged nefarious lending practices. It’a a real joke, but anyway…
A few years ago when we were clueless on mortgages and finance, we refinanced our first mortgate (no change in interest rate!) and they gave us a second mortgage loan for $42000 (at 14.5%!) which makes us upside down in this house about $25000 at present (we would have qualified for much better rates but we never even bothered to pull our credit report and were taken advantage of).
To make a long story short, we find it is ludicrous to hold onto this house worth at most $90000 with monthly mortgage payments of $1300 plus $200 put away monthly for taxes. It needs a lot of work. We are going to convert to a Chapter 7 and let the house go. My question:
Is it possible to do a “short sale” if we find a buyer, probably an investor, who will buy from our lenders and then maybe rent the house back to us if we don’t find a suitable place to live in the meantime? Is this even legally possible? I’ve heard that it is better then just letting it go into foreclosure as it saves everyone involved time and money.
Any advice would be greatly appreciated. Sorry for the length but I felt some background was necessary to fully explain the situation. Thank you and a good day to all.
Answer: I do exactly what you describe, on a daily basis (short sales, 13 buyouts)
They are done all the time, and every bank in the world takes a short pay. Except for Household Finance.
I have literally seen a 1st mortgage of 100k held by Bank A, a 40k 2nd mortgage held by household, a 100k total appraisal, and Household stands firm on wanting thier 40k.
I’m not a lawyer, I’m not giving advice, but if household holds the 2nd mortgage, and the property is under-water value wise, save time – file chapter 7 and start over.
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