Comment

Comment by Ben Benita on February 24, 2010 at 2:07pm

there are MANY ways to avoid the issues that attorney went through. Having done short sales and been an investor myself for a number of years, sounds like he did more of a "default" than a "strategic" default. I would bet with a little more homeowrk he could have avoided many of those problems. I am not 100% certain on the BK laws outside of Virginia where I am located, BUT, I do know if done right here in Virginia, lenders can not touch you post BK.....really sorry to hear about your friend. You will be hearing LTOS more stories of strategic default in the months ahead.

Comment by Gabe Sanders on February 24, 2010 at 1:08pm

Some should really think twice about a strategic default. We just had a local attorney have their other home, wages and assets impounded by the bank in a default judgment against him after he walked and abandoned his waterfront estate. It looks like he will not be protected in bankruptcy court either. He could have had a successful short sale but balked at the judgment, which was minor compared to his problems now.

Comment by Ben Benita on February 17, 2010 at 9:12pm

FYI....you can get a car or a house with a bankruptcy, foreclosure or short sale. You can not currently get an FHA loan with those 3, BUT, you can get a car all day, secured credit all day, conventional loan for a home all day. There are definitely times when strategic default ROCKS for teh Seller, but. like all properties, each is case by case.
ALl my best to everyone in 2010!
Sincerely,
Ben Benita, Expert Short Sales Negotiator, Virginia and Nationwide, www.United-IG.com

Comment by David Dee on February 17, 2010 at 6:58pm

Emily, I agree with you that shortsales will be less severe than a foreclosure. I think that the Strategic Default mentioned by Richard is if the homeowner just let the home go into Foreclosure via Trustee Sale.

He wrote in the last paragraphs, "You don’t need to let the bank foreclose you can sell for less than the balance of your loan and in many cases have a less significant hit to you credit score." and "With a short sale you will have a better shot at getting back your good credit sooner." This statement "A strategic default might make sense at first blush, however it will stick with you for years. Need to buy a car, can’t do bad credit, getting back into a home could take 10 years, Rent?" which was sandwiched between the above 2 statements may have caused the confusion after my 1st glance of it as well.

Comment by Emily S. Knell on February 17, 2010 at 4:55am

Maybe I'm reading your post wrong, I don't think so, I read it twice. Depending on how a person is keeping up on other bills, the short sale doesn't impact a person's credit by as much as you may think. Not only that, but some banks allow a short sale without even having a Financial Hardship or having missed any payments.

I recently closed on a short sale where the seller actually makes more money now than he did when he bought the place, no promissory note was asked for either. Plus he's now qualified IMMEDIATELY after the short sale to purchase another home, FHA w/ 3.5% down. I have found that people who need to rent after a short sale, so long as they are employed, they may need to write an explanation letter to the new landlord, and possibly put a security deposit x a 1/2 down, but that's about it.

I just had another client get into a great rental and we just closed on her home as a short sale, they had missed almost 14 payments. Divorce. There are always many explanations as to why one does a short sale and that needs to be conveyed to a landlord. The landlord just wants his mortg. paid.

After a short sale, so long as the person stays current on all other bills they CAN purchase another home within 12mos., not 10yrs.

Your doom and gloom story after a person short sells is just not true.