hi, im very afraid of my process!
im in a short sale, but now the bank is asking me for the last payments and my w2 form, the thing is that i make decent money but for almost 3 months i made really bad money, even trying to explain that to the bank they send me the letter for a foreclosure, so we stopped making payments, not we have an offer, but we don't want to give those papers, because we think they are going to come for us, knowing that we actually have money to pay.

knowing this we just want to get rid of the Realtor and just do the foreclosure, do i have to pay the Realtor now that we have changed our minds? can they do the short sale even with out those papers?

i saw on tv that they are coming after you now in a short sale, is even easier fro them because they have all your information, rather then just take you to the court in a foreclosure because they know nothing about you!

thanks for your help !

What you are wanting is legal advice for which you need to see a real estate attorney.

Now that I AM NOT giving legal advice here are a few tips. Generally if you live in this residence then the banks most of the time won't come after you. Most of the time if you have one mortgage they will just send you a 1099 form for the loss and then you would have taxable income but it is wiped out by the new law they passed for principal residences.

Now if you have a second mortgage those generally do try to come after you. It is true that if you give up financial documents and they deny the short sale they can use the info to come after your other assets. If you have other assets you might want them titled into an llc or corp so they can't attach to them after the foreclosure. Even if you have signed an offer from a buyer you would still have to sign final documents at closing.

Now the broker could sue for the commission but in a short sale the bank is paying that anyways so it is doubtful they would pursue you and they don't want the bad press. On the papers it is most likley the investor that owns your loan that is requesting all documentation before the short sale is approved.

Now if it does foreclose what you can do is wait and see if they try to come after you. if they do you can file a chapter 7 and wipe them out along with all other creditors that you owe. If you live in a redemption state you still have rights after a foreclosure and you might want to sell those redemption rights for cash to an investor or sign off early with the bank so they can sell the foreclosed asset and free up their reserve requirements for defaulted properties so they can loan out that money again.

I hope this helps but it is just scratching the surface of your situation and options. You could just do a DIL (deed-in-liue) where you sign the deed back to the bank. The bank will only do this if you do not have any other junior liens. If you have junior liens it will be cheaper for the to just foreclose and wipe out all other lienholders.

If you don't have other assets you don't have much to lose but if you have hidden money then it might be best to just foreclose.
The missed payments have dinged your credit score by now anyways. Instead of a short sale do you want to stay in the home?? If so they might do a loan modification where it might be cheaper to stay than to pay deposits and rent elsewhere. Sometimes your payments can drop by 40 percent on your mortgage.
If your home has gone down in value generally the second mortgage (if you have one) will never foreclose as they would have to buy out the first which is usually more than the home is worth in the current market values.

Just foreclose, walk away.

^^ but he lives in Massachusetts and it's a recourse-state, unlike CA.

thank you very much for all your help, just to clarify, we have no assets, and we are just going to foreclosure the property, the Realtor is giving a hilarious offer, that means for us still owe 80.000 that probably the bank will come after us!

Massachusetts is a state that is allowed to sue you for the deficiency so we just think now that is way better just the foreclosure rather than a short sale.

thanks again for your help !!!

I believe in NC they can wait up to 10 years to come after you for the deficiency and in VA it is something like 15 years.

They actually have detectives checking up on you periodically, waiting for you to get something so they can take it.

A builder here just got hit with a deficiency 3 years after his foreclosure.

Just have written into your short sale agrrement that they cant come after you for any deficiency, they may not except it but some of them do. That way you can get closure and not have any worries.

[quote=krispycream]thank you very much for all your help, just to clarify, we have no assets, and we are just going to foreclosure the property, the Realtor is giving a hilarious offer, that means for us still owe 80.000 that probably the bank will come after us!

Massachusetts is a state that is allowed to sue you for the deficiency so we just think now that is way better just the foreclosure rather than a short sale.

thanks again for your help !!! [/quote]

Hi,

First let me disclose that I AM NOT AN ATTORNEY AND I AM NOT GIVING LEGAL ADVICE. I am in MA too. If you just let your home go to foreclosure, the bank can still come after you and the deficiency could be a lot higher because of the foreclosure auction!!! When I negotiate short sales I use strategies to get the judgement waived or at worse case lessened (depending on your situation it could even be dismissed). So far, ALL judgements have been waived.

Alentrepreneur