What do I need to do in order to ask for a short sale for our property?

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What do I need to do in order to ask for a short sale for our property?

We have moved to another city and have had our old home on the market for 3 years. We have done the “right thing” by paying 2 mortgages, but in doing so, have depleted our savings and cannot keep on doing this much longer. Is it possible to do a short sale on our old home without the bank coming after our current home? We have called the bank to ask what our options are, but since we haven’t missed a payment on the house, they will only offer to refinance, which we can’t afford. We are also afraid what a short sale may mean for our credit.

Asked on May 19, 2009 under Real Estate Law, Ohio

Answers:

J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I suggest talking to the short sale department and indicating that you are no longer able to continue to make payments.  A short sale is not automatic - its up to the bank.  If you miss payments then your  credit will suffer big time!  However, if you do not care, then stop making payments and call the bank to do a short sale.  You can then negotiate with the bank that no deficiency will be sought - i.e. the diference in the amount owed and the sale price.  You shold be able to negotiate this and avoid having the bank not go after your other house.  I suggest hiring a lawyer to put the short sale package together as you will need to disclose certain financials.


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