Restructure - short sales, should we stick it out or move on..the big question. Everyday that's the question I get from friends and clients. Its a tough decision for anyone. It comes down to doing the math. If you are already upside down its easier. If you tried to restructure ( good luck) and if its Chase good luck, but if you cant restructure or refinance its time to cut bait. ( its a Florida term)
If you are making monthly payments in hopes you will recoup consider this. If you spend 18000 or more a year ( as an example) in mortgage payments on a declining asset why would you do that. Also, given latest forecasts of growth which breakdown to .5% to 1% for the next couple years and then improving to maybe a 10% improvement over that 5 years then weigh the cost to stay the 5 years including all holding costs, lawn,pool, etc and weigh that against moving into another home that you just bought below market.
The banks continue to make it difficult to restructure and new loan criteria make it impossible to refinance as you may have one home within a mile that sold as a bank owned, short sale or auction and the refinance appraisers are using this to set your value which is usually less then what you need.
This cycle will continue and it is not our fault. The St Petersburg and Clearwater Florida markets are stabilizing somewhat but loans are more difficult and restructuring is just talk.
Steve Busse CRS, GRI,CLHMS,CDPE,E-PRO Broker / Associate www.stevebusse.com
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