Short Sale Perspective

I was talking to a friend recently about their home.  It will be foreclosed on in a matter of days.  I asked what their agent had down with the price and if they given all of the necessary documents to the agent. “What documents?”

The agent they used had a longer established relationship and I am fine with that; it has happened before.  My friend was surprised about the questions I asked.  I listed the things that could be done even at this late hour and I included the story of my recent short sale where I got an offer the Friday before the foreclosure and they postponed it.

But as I listed what to do and how I or someone else could help I saw the look that I have seen a lot in the last few months.  The look of ending a painful marathon.  After trying to fight through the financial hardship for months and months.  Imagine telling a marathon runner 25 feet from the finish line that they have to run another mile or just run anymore.

Foreclosure has been looming for many.  Your hopes go up and down as options come and go.  Better job, raise, possible offer, loan modification, etc.  As these things slowly fall of the list of possibly saving you, you just want it to end.  Foreclosure just feels like a huge finish line, even though it isn’t.

The second mortgage, if you have one, is usually considered an unsecured loan because if the house sold in the foreclosure it usually left no money for the second. They can still come after you for the ballance of the loan but that seems to be rare.  One worry I have is that if the debt just sits there, will it come back to haunt you a year or two later once you have gained your footing?

Others have said that I don’t care how bad my credit is because I won’t ever borrow again and get myself in this situation.  If you go through a foreclosure and a bankruptcy, I understand it to be quite a double whammy.

Five years from now I think many will regret not doing the extra work to try a short sale even though it may not work at least you tried.  Of course if an agent is doing what needs to be done during a short sale it can lead to the hopeless fellings of the clients.  I wish my friend would take the extra steps to try to avoid foreclosure but completely understand the feeling of just being done.