[butkus]

...balance of my mortgage following a "short sale" that is below what I owe? My home is in foreclosure and my realtor has a buyer willing to buy the home at a price agreed on by the bank. Initially the realtor told me the balance of what I owe would be "forgiven" by the bank. Today she informed me that the bank requires I sign a form indicating my continued responsibility for the balance. I'm 65 and unemployed, currently receiving social security, a minimal monthly retirement payment, and unemployment compensation. My future employment prospects are bleak. I cannot afford to pay off the balance. The home is scheduled for a sheriff's sale in a few weeks. The bank will receive much less after a sheriff's sale than they would if they agreed to the short sale without requiring the balance from me. Should I now consider filing for bankruptcy? Do I have any other options? I would appreciate any advice. Thank you (frustrated grandpa of 13)

[ronnie g]

I think you should be consulting an attorney and your accountant with this decision. All banks are different, but i believe they will all ask for you to pay the difference if they think you have the money. If you tell them you do not have it, it seems like bankruptcy might make sense.

[DebbieA]

I'm sorry you are going through this. The answer to your question entirely depends on what state you live in. In my State; Washington, it is a non recourse state, which means that if the lien holder agrees to a short sale or forecloses on my house then they have no recourse to pursue me for the defiency. However, if I have a 2nd mortgage on the house that 2nd mortgage does have the authority by law to pursue me for the defiency. I have been doing short sales for a long time and have yet to see a 2nd mortgage pursue anyone for the defiency. It is too costly and they also know that the borrowor will most likely file bk. Is it your 2nd mortgage that is having you sign? If it is this customary for them to do this. If it is the 1st mortgage; I would say "take the house Mr. Lienholder." It's going to cost them more to foreclose on you

[mpatricia25]

The amount will need to be paid, does not have not be now but eventually if you want to purchase another home or take out a loan that amount will appear in the credit report. You could file for bankruptcy but that is only if you want to keep your home. Still that is if you qualify for bankruptcy. It seems you do not want this home anymore so a short sale is best. If you want to keep your home then apply with a HUD certified agency that can stop the foreclosure and attempt to obtain a better work out for your financial situation.Try:NFMC.orgAcorn Housing