'URGENT..SHORT Sale?..Credit ruined?...2nd Lien? - Posted by AL-distressed lady

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Posted by JT-IN on June 21, 2007 at 07:53:07:

“maintain as much status que as possible”… aka Let’s hope that this situation goes away…

Bottom line is that this person is in way over her head and financial capability. The circumstances are quite unfortunate, but the realities are what they are. The Banker / Advisor may not be providing constructive advice here… I would simply ask him what his recommended course of action would be…? It is easy to say, “no, don’t do this or that…” But having a cogent and meaningful answer and approach is often times much more difficult.

There is really not enough details offered in your post to give any substantive direction on what should or shouldn’t happen here… It greatly depends if she is currently behind on pymts, which it sounds like she may not be, but that it is inevitable. With that said, I wouldn’t be offering anything to a 2nd mtg until you hear back from the 1st. If the 1st is current it is unlikely that they are going to play “charitable contributor here”, just because this gal has a bad situation. The business reality is that the family should have planned for this event and not been so fool-hardy with finances prior to this catastrophic event. Sorry.

What must also be known is what amount is the 1st mtg and what amount is the 2nd…? Sure, the 2nd will gladly settle for 70% on an over-leveraged property. In reality what should happen is the 1st is paid in full and the 2nd takes the big hit… certainly most 1st mtgs would see it that way, and I would too if I was holding the 1st. So your suggestion to the 2nd that they take 70% may well end up working against a reasonable settlement here… since they have that planted in their minds now.

So provide more details of FACTS, balances, current or late… etc. The fact that the family would like to stay in the house is irrelevant, the bottom line is they can’t afford to stay. You seem to be doing more social work here than investor fact finding. Separate your emotions from this deal… and try to look at it as if YOU were owed the money on the 1st… what would you do here…? (think like a big company now).

Better luck to all involved here, but luck may not be enough…

JT-IN

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'URGENT…SHORT Sale?..Credit ruined?..2nd Lien? - Posted by AL-distressed lady

Posted by AL-distressed lady on June 20, 2007 at 23:54:04:

Hey Guys, Will attempt to get the point across without going into too much personl details of particlular homeowner. H/O rrecently ‘loss’ husband due to illness. Husband handled all family finances, he refinanced pulling the equity out of home 2 to 3 times for family needs since purchase of $130K home 11 yrs ago. Resulting with home still being mortgaged for 29+ yrs. pymts around $1400+ per month,preent bal on loan in neighborhood of $230K May possible be able to put home on market and sell it for about $200K! Would still have other outstanding debts another $100k Wife with 1 mimor child still at home, works minmal job at local retail chain. H/O naturally desires to remain in family home for all of their sake, but expecially for the minor child. The illenss was so quick & totally ueexpected! Wishing to be able to maintain as much status que as possible!

Insuramce & other benefits still come up about $100K Short! Apporched ALL lenders with request to take CASH pym’t now of 70% balance on each debt.

Third party banker. with no involment other than acting as an ‘advisor’ to H/o, advised her NOT to do that, even if
lenders agreed, stating it would just ‘ruin’ her credit.

PLUS…now, In addition 2nd mtg/lien holder has come back requesting she do a ‘Short Sale’ on the 2nd?? No response yet from the 1st mtg lender…I feel she would be foolish to go ahead with the Short Sale on the 2nc at this time?? If the 1st Mtg lender took a discount or did a Short Sale,
then how would you respond to the 2nd ntg lender?
What do you guys think or know about this?

Do you believe or know that these actions above would end up destroying her credit? It appears to me, either she go ahead with what she has started now, OR end up having to pay about $30+k on a house she’lll be forced to sale at a loss, plus try to find some where else for her and the children to live, possibly still owe some $50+K on present debts, plus a new mtg or rent pymt for them a new place to live. Just trying to maintain a decent level of living for the family, and on her present income, at her age of 60, I see nothing but ‘hard times’ remaining for her and children, all in the ‘diguise’ of trying to ‘save her credit’??? Guys give us some good advice and guidance…please???

Personally, I would say contiue wtih the attempt to get all the creditors to take a cut on their balances, the 1st mtg lender has gotten thousands & thousands already in extra interest, points, etc. What do you think?

Can some of you with much more knowledge on these proceedings please offer some guidance &/or advise?

Sorry for the length of this, did my best to make it as short as possible, but had to give you enough data to make a knowledgable, informed recommendation.

Thans a million for any and all knowledgeable responses!!!

Good luck to ALL…NONE of us ever knows what is in store for each of us. But for the grace of the good Lord, it could be any of us in ‘this’ situation.

God bless you all!
AL-distressed lady