Short Sale in the Works...

[jisaac]

Looking for a little advice here in hopes I have come to the right place:

 

My wife and I were married this past spring and she moved into my the condo I own in Florida after the wedding. Her name is not on any of the paperwork and my name is the only name on the FHA backed mortgage and title of the condo. Since getting married she was unable to find work here and some additional unexpected costs tightened the ability to make our mortgage payments. However we have remained current and have no late payments reported to any of the CRAs. We have worked with our lender Citi towards a short sale and have offers in to them for review and hopefully approve so we can be out by mid-Dec. They have already qualified for a short sale and as of today say a response to the offer will be available shortly.

 

 

My father in law has offered to give us money for a down payment should we be able to buy a home. With the current condition of the housing market, homes which are nicer than our current condo can be purchased for less than the principal on the mortgage we are short selling.

 

Under what conditions would we qualify for a new mortgage?

 

I have read in a few places conditions of individuals short selling a home and their CR reading "Paid as agreed". Likely this is uncommon but does anyone have comments or ideas that would point toward this result?

 

Thanks in advance for any related advice or comments!

 

- Isaac

[shubbardman]

Under what conditions would we qualify for a new mortgage?

 

I have read in a few places conditions of individuals short selling a home and their CR reading "Paid as agreed". Likely this is uncommon but does anyone have comments or ideas that would point toward this result?

 

Thanks in advance for any related advice or comments!

 

- Isaac

 

 

In order for you to get "paid as agreed" reported on your credit you need to negotiate this through terms which should have been presented along with the offers. The lender will issue an approval letter provided they agreed to be paid short. In that approval letter will be the terms of sale and should describe what will be reported. Once the approval letter issued, which is boilerplate, it is very difficult to renegotiate its terms.

 

Another problem, Florida is a deficiency state and you will need to make sure the approval letter states that your lender will not pursue a deficiency judgment against you. RE Agents do not, as a matter of due course, require this and other protections in their contracts. Therefore, you should insist to see a copy of the approval letter before you close.

 

It is very rare to get a "paid as agreed". Even if you do not miss a payment a short payoff will be reflected on your credit report and you will likely not be able to get right back into a new mortgage. The underwriter will know that you did a short sale by doing about 2 minutes of research.

 

You might be able to obtain a seller financing deal (carry-back) which could get you back into a house right-away. Or, you can find private financing, though usually at higher interest rates.

 

Look, you are trying to get out of a loan commitment and you cannot expect a bank to want to jump bac into bed with you. Wait two years, buy down all your debt, get your Fico score back up, save up a large down-payment, and try it again.

[US Loan Modifier]

The post before this one made by shubbardman is good advice. The only thing I wanted to add is that it will be more difficult to qualify on the next home because the loan qualifications have changed since you purchased your current home.

 

One more thing, do get it in writing ,not verbal, on how the lender is going to report to the credit agencies and then hang on to the paperwork. I've seen issues on credit reports that have had to go back and get removed and if the person didn't have it in writing they would have to go back and fight with the creditor again.

 

good luck,