Housing update: short sale, foreclosure, etc.
I am on the road once again and my internet is a little shaky, so I am not going to run the post that I had originally planned for today. Furthermore, Sheila asked for a housing update on this post and since there have been some developments, I thought I would write about our house once again.
As most of you know, we have been trying to sell our house in another state for 15 months without success. A month ago, I was trying to decide what to do. My attempts to ask our second mortgage holder to release the lien on the home in order to allow it to sell in exchange for my promise to still repay the money were unsuccessful. It seemed like we were going to have to stop making payments and suffer the consequences.
Offer still pending
At the last minute, we recieved an offer – not for the amount of money that we owe on the property, but an offer none-the-less. We requested a short sale from our second mortgage holder, asking them to settle the debt for approximately one third of what we owe them, but it seemed like they were not interested in anything less than the full amount. I then learned that the mortgage holder had insurance on the note that would only pay out if there was a short sale, a default or a foreclosure. Those were all options that I have been trying to avoid. We have good credit and I want to keep it that way.
Short sale or no short sale?
In order to avoid a true short sale, we would have had to come up with approximately $12,000 out-of-pocket on the date of the closing. I was making preparations to do this via a 0% APR balance transfer. A risky strategy, certainly, but I could not afford to risk losing a potential buyer while the mortgage company dragged its feet making a decision.
Falling into place
And then, out of the blue, the company holding the second mortgage called me and agreed to accept the short sale amount on the date of the closing AND allow me to repay the balance of the loan over time.
This will allow us to protect our credit from the effect of short sale or default and allow us to sell our home – exactly what I had asked for originally!
Still hanging on
I have scraped together enough money to keep all of our payments, insurance, taxes, etc. current through July in order to not jeopardize the proceedings. I have had to incur some debt as a result, but it will be worth it if the house is finally sold. You might recall that we had planned to stop making payments in June. If this offer to purchase falls through, we will be in worse shape than before.
So, we are on pins and needles while the buyer lines up financing, conducts the final house inspection and bank appraisals. We are praying and hoping that things proceed according to the plan that has been laid out and we hope to conclude this matter three weeks from now.
We covet your prayers.
Photo by L.Marcio_Ramalho