Re: Foreclosure/Short Sell Florida

Posted by Larry Ludwick on June 19, 2007 at 09:56:39:

In Reply to: Foreclosure/Short Sell Florida posted by Brian P on June 19, 2007 at 01:59:36:

Both lenders must agree to a short sale. Of course the first lender is ok with accepting his full amount and doesn't care whether the second lender gets anything. You should try to negotiate a deal with *both* lenders to accept a little less than what you owe them -- assuming you cannot get enough from the sale to pay them both off. If you can do this the prepayment penalty is moot.

Typically the best way to do this is to take them a contract for sale and purchase and ask them to accept what they can get. It will require some effort to get them both to agree, but if they both don't agree then you're stuck == you can't sell the house unless both lenders agree unless you can pay them both off in full including any penalties. It is doable though.

A short sale will definitely affect your credit -- unless you can get the lenders to agree not to report it to the bureaus. It may (almost certainly) also result in you receiving a form 1099 reporting the short amount as income for you. The IRS will expect its share.

As to proof -- you should prepare what is essentially a financial statement (very like a mortgage application) listing your assets, liabilities, income, and debt and be prepared to share it and explain it to the lenders.

You should consult a real estate agent who is knowlegeable in short sales and the foreclosure process. (Hint, hint.) If you're in the Tampa Bay area I may be able to help.

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