Looks Like a Short Sale...Due to Relocation

[alibaba77]

From what I have read, this is doable as long as it was due to employment relocation. The first is FHA and the second is conventional. I think we'll have enough to cover the first but I'm certain we'll be coming up short on the second. How bad will this hurt my credit? I've read conflicting information. Some say the damage is in the lates that typically lead up to the short sale with little to no damage to the score from the actual short sale. Others say that regardless of whether there's lates or not it is devastating to the score. Is it worth taking a soft note for the difference? Possibly get a PFD upon payoff of the deficiency? I have no issues paying the payments but cannot really do anything long term until it's sold.

 

Thoughts? Advice? Insight?

[alibaba77]

Nothing??

[SportsNut]

Most lenders (not all but most) are not going to approve or negotiate a short sale on a current acct. If you are paying on time why would they? So your next alternative is to get their attention by being late, 60 days usually, and therein lays the issue for the credit score hit.

 

Who is the 2nd with? Different lenders play by drastically different rules, it seems. Additionally, by doing a short sale on a FNMA type of mtg, you will be prohibited from obtaining another FNMA or FHA type mtg for 3 yrs from the date of transfer. Some conventional mtgs may shorten that window to 2 yrs.

Edited June 24, 2012 by SportsNut

[alibaba77]

Most lenders (not all but most) are not going to approve or negotiate a short sale on a current acct. If you are paying on time why would they? So your next alternative is to get their attention by being late, 60 days usually, and therein lays the issue for the credit score hit.

 

That is what I am concerned about although I have read, and CitiMortgage has confirmed on the telephone, that a short sale could be granted on grounds of a hardship (the fact that I have been relocated by my employer) without ever being behind.

 

 

 

Who is the 2nd with? Different lenders play by drastically different rules, it seems. Additionally, by doing a short sale on a FNMA type of mtg, you will be prohibited from obtaining another FNMA or FHA type mtg for 3 yrs from the date of transfer. Some conventional mtgs may shorten that window to 2 yrs.

 

The second is with CitiMortgage. As above, it also my understanding that the actual short sale will not disqualify me, but if I've had any lates within two years, it would.

 

I suppose there's also the possibility of buying before I sell and then doing a short sale or even dumping the old property altogether. I certainly don't want to do that but if it turns out that I would be disqualified from buying due to the actual short sale for two to three years, it may be the only option I have left.

[SportsNut]

Most lenders (not all but most) are not going to approve or negotiate a short sale on a current acct. If you are paying on time why would they? So your next alternative is to get their attention by being late, 60 days usually, and therein lays the issue for the credit score hit.

 

That is what I am concerned about although I have read, and CitiMortgage has confirmed on the telephone, that a short sale could be granted on grounds of a hardship (the fact that I have been relocated by my employer) without ever being behind.

 

 

 

Who is the 2nd with? Different lenders play by drastically different rules, it seems. Additionally, by doing a short sale on a FNMA type of mtg, you will be prohibited from obtaining another FNMA or FHA type mtg for 3 yrs from the date of transfer. Some conventional mtgs may shorten that window to 2 yrs.

 

The second is with CitiMortgage. As above, it also my understanding that the actual short sale will not disqualify me, but if I've had any lates within two years, it would.

 

I suppose there's also the possibility of buying before I sell and then doing a short sale or even dumping the old property altogether. I certainly don't want to do that but if it turns out that I would be disqualified from buying due to the actual short sale for two to three years, it may be the only option I have left.

 

Keep in mind that buying another property before you sell [chg in assets] just prior to applying for a short sale could disqualify you for the ss. If you are able to go out and qualify for new credit, and do so, you may not be a candidate for a short sale. You will need to demonstrate a hardship and attest to it. If you hide assets or a recent transaction such as you mentioned this would constitute mtg fraud upon a lender, so be aware of ALL consequences before you go down this road. There are worse situations than you find yourself in today. Good luck.

[byronm]

I short sold my house october of 2011. The Heloc was closed for less than full balance paid and the mortgage shows a charge off for the short sold amount. It definitely impacts your credit.

 

We're renting now, will rent antoher 1-2 years as we save up to see if we can try and buy at a later time.

 

Bank of America would NOT work with us until we stopped paying the mortgage.. had i known that, i would have stopped paying months earlier and saved a few thousand more bucks.

 

I couldn't do a PFD and haven't looked to see if Bank of America would settle the short sale amount. I already claimed it on taxes so i wouldn't be liable for the short sell as earned income.

 

Honestly though, its the best thing that could have happened to me. Got out from under that house, got a new job and i have less to worry about... some credit dings, bah humbug.. i pay cash now

[alibaba77]

I short sold my house october of 2011. The Heloc was closed for less than full balance paid and the mortgage shows a charge off for the short sold amount. It definitely impacts your credit.

 

We're renting now, will rent antoher 1-2 years as we save up to see if we can try and buy at a later time.

 

Bank of America would NOT work with us until we stopped paying the mortgage.. had i known that, i would have stopped paying months earlier and saved a few thousand more bucks.

 

I couldn't do a PFD and haven't looked to see if Bank of America would settle the short sale amount. I already claimed it on taxes so i wouldn't be liable for the short sell as earned income.

 

Honestly though, its the best thing that could have happened to me. Got out from under that house, got a new job and i have less to worry about... some credit dings, bah humbug.. i pay cash now

 

May I ask the reason for the short sale? Was it because of a relocation or other hardship?

[SportsNut]

 

That is what I am concerned about although I have read, and CitiMortgage has confirmed on the telephone, that a short sale could be granted on grounds of a hardship (the fact that I have been relocated by my employer) without ever being behind.

 

 

The second is with CitiMortgage. As above, it also my understanding that the actual short sale will not disqualify me, but if I've had any lates within two years, it would.

 

 

Yes, a ss can be granted on grounds of hardship, and Citi might be one of the best to be working with on the potential ss. Are you still paying and current on the 2nd at this time or have you gone delq on pymts for the 2nd yet? I think in theory you could obtain a ss being current, but that is a rare item, IMO.

 

Actual ss may not disqualify you if you have an acceptable hardship, BUT as I have read on this subject a transfer for a new job (relocation) may not be an acceptable hardship under the requirements. Death or long term illness of a primary borrower is a suitable hardship. I'm NOT stating anything absolute here but I am cautioning the op to check into your understanding further before entering a long tunnel of hope only to learn info later that you could have obtained on the front end. In other words, eyes wide open here and look for the disqualifiers, not necessarily the answer that you want to see. Just sayin.

Edited July 10, 2012 by SportsNut