From many sellers perspectives this is nothing but lip Service. I just had one of my clients go through the complete process of a short sale. The buyer's offer was very good for the market we are in and the lender accepted the offer but had not signed the final draft of the paperwork yet. That is a key.
They wanted the hardship letter, the current status of the income and debt ratios, which were all provided. When it got down to signing they said no problem we can sell at purchase price offered but the seller will have to make up for any difference at close. We were not asking for much.....not thousands were looking for $2500.00 in discounts off the mortgage. That was to help the buyer with closing costs. The lender said. No.
Do you really think they are working to help you? Do you think they would rather have the average defaulting borrower be foreclosed so they can get the difference from the tarp fund? Which we pay for in higher taxes. I know the lenders are going to pay it all back.....sure they are. Let me see this week Citi Mortgage filed bankruptcy. How many billions did we (government) lend them to survive?
The lender I was working with is known as the worst in the industry for a reason. They wanted to know all the information for one reason so they could foreclose and sell the property. The problem is they won't get close to the sell price of this purchase agreement once the sign goes up as a foreclosure. They will sell for $20,000 less or more than the purchase agreement that is on the table.
I am becoming a believer that we are helping our economy spin out of control by not speaking out. The heath care reform....anyone knows costs are too high....now let's just spend more and make it worse instead of controlling law suits, excessive profits by hospitals and drug companies. This could change the system by billions without spending a dime. For another time and place....the ripping off of America.
Be very cautious when attempting a short sale. Use people that have already done short sales. The lenders are not willing to work with you....the are promoting a lip service game. Without professional help you could find yourself facing a 1099 which means the amount that is written off your mortgage is treated like income to you and you pay taxes for money you didn't get. The lender will control your sale if you sign over your home to them thinking you are doing the right thing. It could cost you. These actions could force you into bankruptcy.
Just some thoughts....you should seek legal counsel and/or a professional Realtor that has experience with short sales and foreclosures.
Hope this helps.
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