Replies to This Discussion

Permalink Reply by Tara Polley on April 12, 2012 at 11:26am

Hi Julian, 

It depends on the investor. Do you know who that is? Some investors have to see a delinquency or at least "imminent default", meaning there is a high likelihood they will become delinquent due to a deficit in the budget before approving a short sale. The Short Sale itself will likely impact their credit minimally, especially if the bank will report it as paid as agreed, settled or paid as negotiated and will typically only do so for 12-18 months. A 30 or 60 day delinquency will impact them, but it can be linked with the short sale and will probably be ok in the long run. Hope that helps! 

Permalink Reply by Julian Jahoo CDPE, SFR, ABR on April 12, 2012 at 1:38pm

Hi Tara,

 

Thanks for the response I am not sure who the investor is yet, but will find out..Are you suggesting the seller needs to skip a payment or two? If so I will probably lose the buyer..

 

Permalink Reply by SE Davis on April 12, 2012 at 11:59am

Freddie Mac will do that too as investor.

Challenge that after your client receives the denial in the mail.

Permalink Reply by Debra Enos on April 12, 2012 at 3:53pm

Hi Julian:

You said your "client" not "client's.  Are both husband and wife on the loan? Even if only one is on the loan, were there two incomes and do their current total combined expenses (credit cards, cars, etc) require the two incomes? Will/is child support a new expense? Has one of them moved out already?  Is the sale of the house required as part of the divorce? Needless to say that my biggest question is how did you present your case, and how did your client(s) present their situation in their hardship letter?  The bank/investor can not and will not read between the lines. Simply stating that they have filed for divorce will not do.

If your client(s) ability to make the payments under the circumstances, is short lived, then they need to state so. "Under the circumstances, we have been struggling to make our mortgage payment and we will not be able to make payments after ......".  If one has moved out then financially they can't afford both rent and house payment, along with two seperate living expenses. If the sale of the house is required as part of the divorce, then you need to state it, and support it with documentation. This trail leads to...."imminent default".  Again, the bank/investor is not and will not read between the lines. 

Paint the scene for the bank/investor.  Let him know, he can short sale now, or later after a few payments have been missed, and property value drops.

PS: Make sure that their income/expense report reflects all expenses, rent and utilities of the one moved out, child/spousal support required to be paid in the interium, etc....you may want to try two seperate expense reports if they have seperated. In today's economic state, it is not unsual that couples live seperately, yet under the same roof until finances can be worked out.

 

Permalink Reply by Julian Jahoo CDPE, SFR, ABR on April 13, 2012 at 2:55am

Ok just called our negotiator and they are going to do a soft decline. They want my clients to miss the May payment and have me call back on June 2nd to restart the short sale..Apparentely all I need is the last two month bank statements, last 2 month pay stubs and a revised HUD 1..

Hopefully the buyer stays onboard if not the property will have to go back on the market.. 

Pretty crazy that the bank would not want money from the borrowers and prefers them to miss payments...My clients are fine with missing payments but they just wanted to do things right and try and do damage control on their credit...