questions & answers

Question: I bought a house back when the housing market boomed and at the time had a decent job that can pay for the mortgage. A year and a half later my contract ended for the job and now can't afford the mortgage. I am wondering if it's possible to do a short sale with a good amount of savings in the bank? I have 2 mortgages with 2 different lenders. I just don't want to deplete my lifetime savings before I do a short sale. I haven't missed a payment.

Answer:

Yes it is possible. The concept of a short sale is a great out for those who find themselves upside down in a house. It is literally a win-win for both the lender and borrower.  Lenders are doing everything they can to avoid taking back houses as it is estimated that they lose between 30-40% in a foreclosure and resale.

That said, there are a lot of moving parts that have to come together. You may want to find a real estate agent that specializes in short sales, who will agree to be compensated wholly by the lender and will not look to you for commission. There are a number of agents out there who are doing this.

 Lastly, keep in mind that your liability post short sale or if a foreclosure occurs likely lies with your 2nd mortgage so it is important to obtain a release from the holder of your 2nd mortgage at the conclusion of the process.