I signed all the paperwork today to get my house on the market. Apparently, the house must be listed for 90 days before the bank will begin to negotiate a short sale or deed in lieu of sale. (That means that the bank simply agrees to take back the house....wonder how often that happens.) In the meantime, I should be expecting a packet requesting that I compile all kinds of intriguing paperwork; taxes from the last two years, a letter explaining how I've arrived at this unhappy state in life, and who knows what else. When I do know, I'll surely write about it.
I've considered, and reconsidered, the affect this will have on my credit. As I've watched my credit card debt slowly creep higher and higher, I've realized that somehow, no matter what, my credit is going to be affected. It's really a matter of how mildly or how badly. First of all, certain bills are not going to get paid, because I can't give what I don't have. So, it's really up to me to decide which bills to give the cold shoulder to. If I don't pay my credit card bills, my credit is dinged. If I don't pay my mortgage, my credit is damaged. I've chosen to go with mortgage.
The impending damage to my credit will depend on how and when I lose my house. The best case scenario would be returning the house by deed in lieu of sale. If the bank doesn't care for that option, then I can hope the house sells quickly. A short shortsale is preferrable to a long shortsale, and the longer it takes, the more destructive it is to the ole credit. Of course, foreclosure is worst case scenario. In that case, my credit will be drawn and quartered in the most painful and humiliating way.
Like most others in my position, I'd rather not do any of the above. I wish I could sell my house for what I owe, but I owe $30,000 more than it's worth. I wish I could ride out the storm and continue paying my debt, but the money just isn't there anymore. I wish I wasn't contributing to the economic downfall of our country, but the economic downfall put me in this position in the first place.
So, here I am making the best decisions I can, and waiting to find out what more lies ahead.
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Having recently purchased a short sale home, it is interesting to read what it is like for the home owner. When we made our offer, we were told that it moves more smoothly and quicker when dealing with only one lender. Some home owners have home equity lines of credit from a second bank. How many banks are you dealing with? Anyhow, everything will be ok in the end.
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