Not a true Hardship?

We have a young client who's mother co-signed on her loan. The mother decided since she cosigned she would move in with her daughter. The relationship between mother and daughter is terrible and both want to short sell the home to get away from each other. The daughter is even considering moving out of state! The daughter also has a child (no husband).

Their loan is not in default and both make plenty of money. The hardship really is the relationship and as you can imagine the tense environment with a child there.

I think we may have a shot at B of A considering this short sale with this hardship. If one just leaves because of the relationship, the mortgage will go into default. This property is seriously under water.

What do you think of this situation and the potential for short sale?

Views: 239

Replies to This Discussion

Permalink Reply by Kevin - Greenville, SC on April 30, 2012 at 7:42am

You're chances are better if it's not a Government Back Loan, but you're really not going to find out the true answer until you try.

Permalink Reply by David D McElroy on April 30, 2012 at 8:06am

 

Good afternoon

I have a suggestion. Have the borrower with the least income and assets take sole title to the subject and the other party move out. You can then qualify the occupying party on their own absent the income and asset of the vacating party

Permalink Reply by Bryant Tutas on April 30, 2012 at 9:02am

David. The borrowers go through the short sale not the owners. Regardless of who owns the property the loan is still in both names. And therefore both will have to provide financial documentation.

Permalink Reply by David D McElroy on April 30, 2012 at 9:34am

That is incorrect

I teach loss mitigation  to attorneys nationally for continuing legal education credits

I've closed may short sales with different lenders with the structure I described Bank of America included as well as FHA loans

Permalink Reply by Cathy Baumbusch on April 30, 2012 at 11:51am

David, I just went through this with a short sale I have in process. The wife quit-claimed the deed (in absence of my advice) to the husband and Bank of America refused to move forward unless she was on the sales contract. So, yes, the BORROWERS go through the short sale, not the persons on the TITLE. At least in my case. After a week of arguing I gave up and added her to the contract anyway.

Permalink Reply by David D McElroy on April 30, 2012 at 12:27pm

 Good evening Cathy

For married couples they would have to be divorced to use that structure 

Permalink Reply by Michael Hayley on April 30, 2012 at 8:07am

Document it as well you can. If she has decided to move out of state, especially document the pending move and new employer. 

Permalink Reply by Cathy Baumbusch on April 30, 2012 at 11:52am

Can the daughter find a job and get a commitment letter from an out of state employer? Can she get a letter from her doctor or a counselor stating that it is an unhealthy environment for the child? You'd be in a better position if somebody already moved out and the other can't afford the mortgage. I heard on another forum on this site that effective June 1, the borrowers no longer have to be in default. There is also something else I heard of called the Opt-out or Coop program something like that.

Permalink Reply by Cindy Nordstrom on May 1, 2012 at 4:36am

Thank you to everyone for your responses. I will take them all into consideration.

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