Fidelity bank wants me to short sell.....???

[Brighterdays]

Fidelity bank wants me to short sell rather than foreclosure. I called them today to see what my options are. I am currently 21 days late and haven't even thought abut selling it as I am at least 20k upside down. They want me to list it with a realator. I don't have a problem with this as I am in the process of moving. I am not interested in seeing how long I can live here rent free as I won't be paying rent were I am going(no not jail).

anyways, how does a short sale show up or hurt your credit?

I mean is it worth it to bust my hump to fix the place up, as opposed to spending my time and resources on finding a job. The house will be like 2 hours away from my new place.

[AfraidOfBK]

are you filing BK or did you already? Several realtor friends have told me that even with a short sale your credit will go down and are the worse option if you already know you dont want the home:

1. because you;re missing mortgage every month. short sales take time and every month missed hits the credit worse

2. they will still ocme after you for deficiency balance, even though its your primary residence - you may not have to pay taxes on it, but the bank can and probably will sue

3. I think it shows up as "pre-foreclosure status" on credit report IF you have missed payments.

Are you curent on mortgage? Cuz that changes everything.

Like you said, who wants to break their back fixing up a house to make it market ready when the bank is gonna follow you and haunt you anyway? I'd let it go, depending on your BK situation, of course.

This is just advice I have gotten from two realtors I trust quite well...it is also simply my humble opinion

[Brighterdays]

are you filing BK or did you already? Several realtor friends have told me that even with a short sale your credit will go down and are the worse option if you already know you dont want the home:

1. because you;re missing mortgage every month. short sales take time and every month missed hits the credit worse

2. they will still ocme after you for deficiency balance, even though its your primary residence - you may not have to pay taxes on it, but the bank can and probably will sue

3. I think it shows up as "pre-foreclosure status" on credit report IF you have missed payments.

Are you curent on mortgage? Cuz that changes everything.

Like you said, who wants to break their back fixing up a house to make it market ready when the bank is gonna follow you and haunt you anyway? I'd let it go, depending on your BK situation, of course.

This is just advice I have gotten from two realtors I trust quite well...it is also simply my humble opinion

Hey thanks for the reply. I am going to file ch7 in about 70 days. I am currently 21 days behind. I am letting the house go one way or another. I will make an effort to clean it up and make it presentable if I know there is a reward. but with moving and searching for a job, my time is precious.

I have to move, the unemployment here in toledo ohio is like 12%on paper and 24% realized. we are doing the death spiral as they are laying off 150 cops(about 20%) cause we are 28million in the hole. The layoff will spike crime and lower values. I need to get where the jobs are at least when I move i will have columbus,dayton and cinnci within an hour.

[eddiep]

I have to move, the unemployment here in toledo ohio is like 12%on paper and 24% realized. we are doing the death spiral as they are laying off 150 cops(about 20%) cause we are 28million in the hole. The layoff will spike crime and lower values. I need to get where the jobs are at least when I move i will have columbus,dayton and cinnci within an hour.

These are scarey times aren't they! Who would have thought that it would come to this, Americans abandoning their homes, relocating just to find work, states laying off so many police that the citizen do not feel safe. Sounds like the begining of a scarey movie!

[Brighterdays]

These are scarey times aren't they! Who would have thought that it would come to this, Americans abandoning their homes, relocating just to find work, states laying off so many police that the citizen do not feel safe. Sounds like the begining of a scarey movie!

yep, I definately think things are gonna get worse. not an obama basher here(cause I think they both suck) but the man has no experience, none, nada. I mean... really what good is he? He sure can spend money though. I have two word solution.... Term limits.... I just wish both sides would quit trying to blame the other.

Anyways, 39 yr old, graduated cum laude, moving back home with mom. Wow, times must be rough!! oh almost forgot bankrupted 39yr old.

Last thought, buy Gold and Bullets, I mean a lot of bullets(if you can find any).

read the article below to see how screwed we are.

http://www.minyanville.com/articles/index/a/22304

[StartingOver08]

The only reason the lender asked you to put the house on the market is so they can continue the foreclosure process AND have evidence you are trying to sell it.

The lender/servicer has to show the selling effort to the mortgage insurance company in order to collect the mortgage insurance when the house forecloses. It is just a step on the checklist. BTW, even if you do not pay mortgage insurance, it is a good probablity the loan is insured with a blanket lender paid policy.

No, it does not help your credit to short sale rather than foreclose - it is the same impact. The BK will wipe out the deficiency.

[billsbroke]

Why would they do that being only 21 days late??

[Brighterdays]

Yes I do have pmi(after 5years) I asked for it to be removed but they demanded an appraisal, which wouldn't help me in this market(toledo, ohio). I only pay $30 a month for pmi.

As for why after only 21 days, i called them and asked them if they could defer payments under a hardship(no job). They said they only do remod of loans but without a job i wouldn't qualify.

I am only going to live here another month, so I was just inquiring as what would be the least damage to my credit. The job market up here is horrible and the unemployment is at 14%. I made the decision to move back home (between columbus and dayton) as it is rent free. Even thouh I could live rent free in toledo for about a year, It wouldn't advance my career opportunity. Toledo is laying off 150 cops(25% of total force). this city is in a death spiral and is going to hell in a hand basket. we are only 45 minutes south of detroit, and the going joke in detroit is "The last one out, please turn off the lights"

[chloe0724]

If you are filin for BK, I would just let it foreclose. There's no reason for you to break your back to get it ready to sell if you plan on giving it up anyways. The BK will take care of any deficincy. And your credit will be affected by the BK anyway, so it doesn't really matter if it's a foreclosure or a short sale. 2 of my neighbours are trying to shrt sell, and it has been the biggest PITA ever.

[Brighterdays]

If you are filin for BK, I would just let it foreclose. There's no reason for you to break your back to get it ready to sell if you plan on giving it up anyways. The BK will take care of any deficincy. And your credit will be affected by the BK anyway, so it doesn't really matter if it's a foreclosure or a short sale. 2 of my neighbours are trying to shrt sell, and it has been the biggest PITA ever.

I am definately leaning towards the path of least resistance. I will list it with a realator(if my attorney ok's it) after I get all my stuff out. I have no anamosity with my lender as I dont blame them for my job loss. I have read how people have set live pigs lose in the house or strip out every thing including wiring and plumbing just to spite the bank. sorry but thats not the way I roll. i have been on a 5 year arm at 2.8% for the last 5 years, so I would hate to see the spike when the libor rate starts going up.

[chad9162]

If you are filin for BK, I would just let it foreclose. There's no reason for you to break your back to get it ready to sell if you plan on giving it up anyways. The BK will take care of any deficincy. And your credit will be affected by the BK anyway, so it doesn't really matter if it's a foreclosure or a short sale. 2 of my neighbours are trying to shrt sell, and it has been the biggest PITA ever.

Yes I agree chloe....if your BKing who cares. I wouldn't do anything. My buddy remodeled and added a new roof, even though he knew he was walking away. That was a waste of $20K....

[Brighterdays]

Ok I asked my lawyer about it today. She says a short sell is better on your credit because there is no court involvement reported on your credit report.

Now I agree with chad, it seems rediculous to throw any money into it. but a small amount of sweat equity and maybe a coat of paint to keep a foreclosure off you credit doesn't seem too bad to me.

[chad9162]

but a small amount of sweat equity and maybe a coat of paint to keep a foreclosure off you credit doesn't seem too bad to me.

Very true....just realize that this could be a ploy...in CA there are numerous short sales yet banks aren't approving anyone to buy the houses. Instead they allow the house to foreclose, which stripes all the other liens, and then sell the house as "Bank Owned." Foreclosing is actually better for the 1st lien holder since they get rid of all the other liens....

[chloe0724]

And if you BK, it's all moot. A BK is the biggest ding to your credit. If you are going to file BK, there's no incentive for you to short sell. Period!

[StartingOver08]

Both Chad and Chloe are right - in our area only 4% to 7% of the short sale properties actually close. Almost all of the short sale properties go under contract - but the lender comes back with some condition that makes it impossible for the seller to accept. Either the first mtg or second mtg or the mortgage ins company come back with "seller to pay X amount to lender/mtg ins over the next 10 to 30 yrs at X%" Many times the payback is huge - this is AFTER the closing. Why would you want to take on a note to repay the lender after you short sale the property? Now, if you are going to BK the note - then it doesn't matter - but if you have already filed your BK - that is an issue!

In our area, there is no doubt the lenders prefer to foreclose. They only provide lip service to working with the seller/debtor. The loss mitigation depts are an extension of the collections dept - just there to gather all the relevant asset and liability and income information.