When the bank is stalling your short sale, there may not be much you can do to make the process go quicker. However, most banks realize that taking a short sale offer is better than the foreclosure process.
Q: My husband and I purchased a home in 2006. But I lost my job in 2010, drained our savings, and started charging groceries and daily necessities on our credit cards in order to keep up with our mortgage payments.
I searched for some assistance but was told there was nothing for us. So we put our house on the market and submitted our short sale paperwork back in March of 2012 before missing our first payment in June. But even though we have done everything they’ve asked, our bank has continued to use stalling tactics – repeatedly claiming they did not receive paperwork, asking for additional documentation, etc. We tried to make a mortgage payment, but the bank refused to accept anything less than the full amount owed.
The bank finally approved our short sale application in September but they have failed to order the appraisal, and no one can tell me why. The bank tells me it will take another 30 to 45 days to complete the appraisal once they receive the order, and there’s no telling how long the bank will take to consider the offer after that. Our buyer has been patient so far.
The bank has filed for foreclosure, and I’m convinced they are just trying to wait us out because it will be more profitable for them. Meanwhile, my husband has found and accepted a new job out of state, and we are ready to just deal with whatever the bank decides and start over somewhere else. I’m extremely concerned with the prospects of finding a nice rental home now that our once excellent credit has been destroyed.
I’m afraid that with every month we remain in our home without paying mortgage we are less attractive to prospective landlords, especially if we end up with a foreclosure on our record anyway. If the bank continues to fight us, is it better to just vacate the property and hand it over to the bank so we can begin rebuilding our credit sooner than later? If so, what’s the best way to approach rental property management companies when in this situation?
A: Most banks have come to realize that taking the short sale offer is generally better than proceeding through the foreclosure process. Even though they have come to that realization, they still make the whole short sale process tedious and unduly long. To homeowners in trouble, it feels like a deep black hole.
The good news for you is that the bank has approved the short sale. That’s a good start. If your buyer is willing to wait, the process may be slow, tedious, and long, but in time the bank should come through and allow the sale to go forward. You will need patience.
What’s clear is that you are ready to move on. Your husband has a new job and when the time is right you should look for a new home. If the lender comes through with the short sale in time, it will benefit in having a home that is cared for and can transfer title to a willing buyer.
Normally when banks foreclose on homes, they find that the homes are in a state of disrepair. When utilities are shut off and homes are vacant, homes tend to decline rapidly. Not only does the vegetation around the home grow and give the home a decrepit look, but the interior of the home will start to suffer. In colder climates, pipes freeze and cause damage, in warmer zones, the humidity starts to kill the interior of homes.
This may come as a surprise, but you’re better off than many other homeowners that are in your situation. You have the ability to start fresh. You’re paying down your debts. You can rebuild your life in a new state with your husband’s new job.
While your credit has already been hurt considerably, and a short sale or foreclosure may hurt your credit score and credit history further, that damage should not impair your ability to rent a home and start rebuilding your financial life.
Large-scale landlords have seen many rental applicants like you and understand what you have gone through. We feel sure you’ll be able to rent a home in your new location. That’s because the number of folks renting homes is on the rise and there is actually great strength in the rental market.
As you move towards your next job and find a place to rent, your new landlord will evaluate your application for a new rental more on the basis of your ability to make your future rental payments and less on the circumstances surrounding your former home.
If you still have a huge credit card load, your new landlord may look at that credit card debt with a keen eye to determine if that debt load may result in other financial problems for you.
Make sure you evaluate your financial situation to determine how to get your finances under control. If your credit card debt is manageable and decreasing, your job prospects put you on a path to financial stability, your past housing problems should post a significant problem for you in the future.