Loan Modification? Short Sell? What to do, what to do?!

[NaturalLove]

Hello all! We have a mortgage with Citi and realized in January of this year that we just can't keep up with the payments due to my husband's job loss. It's been over a year and we've still not replaced his income. We put our home on the market the first week in January. We finally had to lower our price significantly about three weeks ago. The list price is less than the amount we owe. In the meanwhile we also tried to see if we could do a loan modification. The paperwork finally arrived (Citi is a mess) and we've been put on a "trial period" where we have to pay a certain amount for three months and send in certain documentation along with the first payment. This modified amount is actually affordable to us. Now, given that it is a trial period, they may determine after we make our three payments, that we don't qualify and they may want more, which I certainly cannot pay. Today, our real estate agent called and told us that we received an offer on the house. They are offering the list price, but want 3% paid towards closing costs. Again, it would be a short sell. I am wondering what is the best course of action. The modified payments are relatively affordable. However, if we could sell and just get rid of the property and start anew, that would be great. If I knew that the modified terms were set in stone, I'd probably say to heck with the short sell, we'll keep the house. But we're dealing with a lot of uncertainties here. We don't even know if Citi will accept the offer. Should I go ahead and turn the paperwork in for the mod and pay just in case the short sell falls through? What if Citi decides we need to pay more?

 

Any advice/comments/thoughts you all have would be very much appreciated.

[NAN101]

If it's a modification under making home affordable, the trial period (3 payments) is required.

[NaturalLove]

Hey, any body out there that can answer my questions?

[NAN101]

Have you even approached Citi about a Short Sell? If not, you're certainly going to have submit all the paperwork and prove your case. Will your purchaser be willing to wait for that approval? You'd still have to go through the whole proving/approval process on your end if you were to go that route.

 

Again, if the modification is being determined under the MHA program, the 3 trial payments are required - no way of getting around it.

[NaturalLove]

Yes, we've approached them about a short sell. That was one of the first things we did back in January. I understand that the 3 trial period payments are mandatory. That's not the issue I have.