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Forced to Move

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If you are in a position where you are forced to move, say by job
transfer or because of health and clinic attendances, and you cannot sell
your home, what can you do?

 moving, home sales, selling real estate, short sales, foreclosures

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If you are in a position where you are forced to move, say by job
transfer or because of health and clinic attendances, and you cannot sell
your home, what can you do?

Well, first let's clarify the issue: chances are, you can sell your home
- but you don't want to sell it for a nominal amount. You don't want to
sell it for an amount below its value, or worse yet – you don't want to
sell it for below what you owe on it.

Some people just walk away from their home and start over - not
advisable. This impacts your credit rate badly – in fact, it is the worst
possible thing you can do to it!

One possibility for solving this matter is to tell your Lender the truth.
The Lender does not want the bother of foreclosure either; it will cost
their company money. If you tell your Lender that you cannot pay the
monthly costs, you can then ask them if they can help you with a short
sale on your property.

In order to back this request up, you will need to have a copy of a
financial statement that you will have drawn up. This will show your
assets and wages and will prove to them that you have no more money left
to pay the mortgage.

You will also need a current market evaluation of the property from your
real estate agent, and an offer from a prospective buyer. If you don't
have this, you will need to persuade your Lender that you can arrange all

This is where the crunch comes, because you must be genuinely without
cash, assets, savings, investments or liquid retirement funds and
anything else that could be turned into cash.

The reason for this stringency is because the Lender is going to take the
loss for you. Therefore, he wants to make sure that you are not pulling a
fast one on him!
Here is what happens: your mortgage is worth $400,000. Your house, at
this time, is only worth $370,000.

You will lose $30,000 plus costs. If a buyer can be found, the Lender
will 'write off' his loss of $30,000 and you will leave the house behind
you - but with your credit rating still intact.

You will have to talk to the Loans Department of the Lender concerned.
Once this is done, your real estate agent will start to prepare the deal.

At this point, both you and the buyer will have to be patient. There are
several people involved in the decision over whether to accept the
prospective buyer's offer or not. Firstly, the Lender is probably only
the middle man, so he has to get agreement from the actual 'investor'.
Assuming you have mortgage insurance on the loan, the next step is to get
the Insurance Company to agree.

Short sales can take even longer in cases where there is a second
mortgage held on the property; they also want 'a cut' of the capital
released; sometimes having the second mortgage on a property makes the
deal too difficult to negotiate.

In a short sale, at least your credit rating has been preserved which
means that when you feel more confident, you may buy another home to own.
There is one positive aspect to all this, and that is your newly-acquired
expertise in short sales procedure. You are now familiar with it, and may
be able to buy a new home through a short sale, thus offsetting some of
your losses.

Be aware that the IRS looks upon short sales as a forgiveness of debt,
and as such this counts as income. This means that you have to declare it
to the IRS in your yearly returns.

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