Short Sales: HELOCs and 2nd Mortgages
Question: I am upside down on my Tampa home, and I have 2 mortgages. Can I do a short sale?
Answer: Yes, absolutely. As Certified Distressed Property Experts (CDPEs), we ensure that you are aware of all options including: refinancing, modification, deed-in-lieu, short sale and foreclosure. To qualify for a short sale, you must demonstrate an acceptable hardship, financial insolvency, and a monthly short fall of income. We offer guidance, example hardship letters, a financial worksheet, and a list of documents that you would supply to your lender(s) to help make this case.
Once we have an offer on your home, we submit a package of information that often exceeds 100 pages to both first and second mortgage companies. If the short sale is accepted by the primary lender, then the primary lender usually offers a small amount to the 2nd mortgage company to release the lien. We have had excellent success with both first and second mortgage companies, but the negotiations can take a couple months. One caveat to consider is the HELOC. If your 2nd is really a Home Equity Line of Credit (HELOC), then many of the mega banks have been demanding a more substantial payoff to release this obligation.
Once in the short sale / foreclosure process, many homeowners stop making mortgage payments. If you have a 2nd mortgage or a HELOC, then please do everything possible to make occasional payments on the HELOC or 2nd, as banks have been selling these loans to collection agencies after 180 days without a payment. Once these loans have been charged off, or sold to collections, then the chance of a short sale are greatly diminished. For more information short sales, contact Team Bohannon at Coldwell Banker in Tampa today.
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