Can I do a short sale and how?

[gocubs2012]

What is the name of your state (only U.S. law)? Illinois

Hi everyone, here's my situation, i do not know really where to even start so any advice would be great. I own a townhome and have a second mortgage. i owe $149,000 on the 1st mortgage and $24,000 on the second. I got divorced in August 2011 and we have been renting out the home because we also have a daughter and both of us have been living with family/friends since. short sales in the area are now at around $90,000. I have never been late on the payments but am down to spending every penny each month paying for that and also credit card debt (so between the divorce and debt i do have a hardship). Question is, since this not my "primary" residence would i be able to get a short sale? also would I have to pay all the taxes on that since it is not my "primary" (even though it sort of is). Also, my tenant has a lease through november 2012. So how long does a short sale take if i do qualify? do i start the process now or do I wait until we get closer to November? just as another piece of information, my ex is on board with this as well. Thank you to anyone that may be able to help.What is the name of your state (only U.S. law)?

 

[justalayman]

whether a bank will accept a short sale or not is completely up to them. They are not required to agree to a short sale.

If you do end up doing a short sale, make sure the bank not only releases the lien they hold but also release you from any deficiency balance. If they don't, kind of defeats the purpose of a short sale but in Illinois, unless things have changed, they can sue you for the deficiency if they do not agree to release your liability.

 

[HUD-1]

In this case, there are two lenders and they both would have to agree with a short sale. Ususally, there has to be a hardship and the loan is usually delinquent as a result of the hardship. Also, usually, it has to be your primary residence. If your ex is still on the Note/Mortgage, then they may use his/her income as well to determine if there is a hardship. In short, you need to have a discussion with your two lenders.