I know- It is horrible, but we did everything possible to avoid it. Our business went for broke, and we flew throught the savings. We held on to our main home too long, while waiting for a building permit for a new property that never happened; facing homelessness. My home is now in pre-forclosure. I have a Heloc as a secondary.
Willow value 250K

We owe:
115K BoA
155 WAMU

I have submitted paperwork-WAMU- to let them know we need to short sale it. I have not done this before, so I did not know I needed the offer beforehand. We are recieving tons of advertising pamphlets- I don't know who to believe. What do I need to look for in a RE agent/agency to help me in this process?

Where are you in the foreclo process? What's happened so far? NOD? Auction date? Auction? Right of redemption? What state are you in?

chavi said:I know- It is horrible, but we did everything possible to avoid it. Our business went for broke, and we flew throught the savings. We held on to our main home too long, while waiting for a building permit for a new property that never happened; facing homelessness. My home is now in pre-forclosure. I have a Heloc as a secondary.
Willow value 250K

We owe:
115K BoA
155 WAMU

I have submitted paperwork-WAMU- to let them know we need to short sale it. I have not done this before, so I did not know I needed the offer beforehand. We are recieving tons of advertising pamphlets- I don't know who to believe. What do I need to look for in a RE agent/agency to help me in this process?

delzy said:chavi said:I know- It is horrible, but we did everything possible to avoid it. Our business went for broke, and we flew throught the savings. We held on to our main home too long, while waiting for a building permit for a new property that never happened; facing homelessness. My home is now in pre-forclosure. I have a Heloc as a secondary.
Willow value 250K

We owe:
115K BoA
155 WAMU

I have submitted paperwork-WAMU- to let them know we need to short sale it. I have not done this before, so I did not know I needed the offer beforehand. We are recieving tons of advertising pamphlets- I don't know who to believe. What do I need to look for in a RE agent/agency to help me in this process?
Wow, you better get another job. What exactly does "our business went for broke" mean? It appears that your business should have gone for profit.

Folks, this is another example of the thinking that gets you in hot water. Let me rephrase the OP.

What OP really said:We have a business that doesn't provide enough money for our desires for a new house, cars, big screens and other various electronics and toys. We are especially greedy for a new and bigger house like all our neighbors have done during the housing boom. Therefore, we have decided gamble on life more by financing a business expansion through a second mortgage on our home giving us about 105% LTV.

The deck of cards we threw into the air did not fall down in perfect order, so now I need to ask my anonymous internet friends how to get out of this jam. Please help me because I'm too broke/cheap to pay a RE agent/lawyer.

ROFL, thanks for my morning laugh break!

Lawyer contacted me, and told me he would forward the paperwork to Attorneys. I have not recieved any info after that initial contact a couple of weeks ago. I am in AZ.

It was my husband's business. I am a fulltime teacher. No fancy lifestyle, just trying to move to a safer neighborhood for our children- we had plans to build a small home, but the land had unforseen restrictions. Business was slow, nothing we could do about it. We went out clear, ensuring all our customers were happy.

Thanks for your time.

We have applied for second p/t jobs. We are four months behind. We owe about 8K now. We are barely making ends meet now, so it will be difficult to pay what we owe.
I am not sure what I could sell it for, but I did see a home listed for 215K, a comp, that is also a short sale in my area.

Will any type of realtor/RE be fine? Are there specific questions I should ask them?

delzy said:How in the heck could any of these vultures "bail" OP out? OP is upside down. These people look for equity... not negative equity.By arranging a short sale with the bank.

delzy said:lorcha said:By arranging a short sale with the bank.

Please, pray tell how this would work in OP's case. OP is upside down a total of $55k and has a 115K Heloc in second position. Please educate me how this short-sell thing works - that a third party interloper can convince the banks to write down this kind of money.Why is it so hard to understand? OP is never going to pay that $55k negative equity. She doesn't have it and can't get it. Sure, there's a piece of paper that says OP owes that $55k, but there is no collateral to back it up. It might as well be toilet paper.

What would you do if you were the holder of the 2nd trust? Would you take the $55k write down now? Remember, you only have but so many choices. Your wife is on your back (like the bank's board is to the banker) for having a non-performing asset on your books, the 1st noteholder is foreclosing and is under no obligation to try to get enough for the property to make you whole, and your money is tied up (you can't invest it in a non-deadbeat).

Would you make the 1st noteholder's payoff and foreclose, yourself? Throw more money into this sink-hole? To what end? More legal fees? More carrying costs? More delays while the homeowner files for BK? Dealing with the trashout when the angry homeowner takes everything off the premises she can?

Ahh, but an investor contacts you and offers you cash money. It may not be everything that you're owed, but remember, you don't stand any chance of getting what you're owed, anyway. What would you do?

I work preforeclosures a bit (it's not a huge part of my business), and I'll tell you that my absolute favorite thing to see is a large second trust. A $55k write down on a $115k HELOC is definitely not unheard of.

lorcha said:delzy said:lorcha said:By arranging a short sale with the bank.

Please, pray tell how this would work in OP's case. OP is upside down a total of $55k and has a 115K Heloc in second position. Please educate me how this short-sell thing works - that a third party interloper can convince the banks to write down this kind of money.Why is it so hard to understand? OP is never going to pay that $55k negative equity. She doesn't have it and can't get it. Sure, there's a piece of paper that says OP owes that $55k, but there is no collateral to back it up. It might as well be toilet paper.

What would you do if you were the holder of the 2nd trust? Would you take the $55k write down now? Remember, you only have but so many choices. Your wife is on your back (like the bank's board is to the banker) for having a non-performing asset on your books, the 1st noteholder is foreclosing and is under no obligation to try to get enough for the property to make you whole, and your money is tied up (you can't invest it in a non-deadbeat).

Would you make the 1st noteholder's payoff and foreclose, yourself? Throw more money into this sink-hole? To what end? More legal fees? More carrying costs? More delays while the homeowner files for BK? Dealing with the trashout when the angry homeowner takes everything off the premises she can?

Ahh, but an investor contacts you and offers you cash money. It may not be everything that you're owed, but remember, you don't stand any chance of getting what you're owed, anyway. What would you do?

I work preforeclosures a bit (it's not a huge part of my business), and I'll tell you that my absolute favorite thing to see is a large second trust. A $55k write down on a $115k HELOC is definitely not unheard of.

Please explain who pays what to whom. The foreclosure buyer is certainly not going to pay more than the $215 listing down the street. Does he offer WAMU full payment and BOA $40k on their 115? I still don't get how BOA takes the full hit and allows the sale to go forward if OP has any assets. Please use numbers to simulate how the foreclosure buyer can buy the property. I'm sorry I'm so thick.

delzy said:Please explain who pays what to whom. The foreclosure buyer is certainly not going to pay more than the $215 listing down the street. Does he offer WAMU full payment and BOA $40k on their 115? I still don't get how BOA takes the full hit and allows the sale to go forward. Please use numbers to simulate how the foreclosure buyer can buy the property. I'm sorry I'm so thick.The principle here is that the 1st noteholder always get paid first. Junior lienholders get paid in turn.

I don't think OP ever specified who was in which position, but let's assume that the BoA $115K note is 1st position, and the $155K WAMU note is second (the reason I made this assumption is that OP asked WAMU for a short sale, not BoA). Total debt outstanding: $270k

Let's say the property is worth $250k fixed-up, but $215 in an AS-IS quick-sale (using OP's numbers). So I fax a letter to WAMU that says, "The Chavis' business just failed, and they can't pay their mortgages anymore. The property is in rough shape, and it's only worth $215k as-is, at auction. The Chavis' and I entered into a purchase agreement to buy their property for $215k cash (please see attached proof-of-funds letter), contingent upon WAMU's acceptance of $100k as payment in full for the $155K debt outstanding. The Chavis's attorney has informed them that if this last-ditch effort fails, that their only remaining option would be to file for bankruptcy to avoid homelessness. What say you?"

Translation: "Yo WAMU. OP owes you $155k, 55k of which she don't got and you'll never get. You can accept $100k now, or $85k in one year after your attorney's fees, trash cleanup, carrying costs, and OP's BK runs its course. In the meantime, your board of directors who set your bonus think you are an idiot for carrying this non-performing asset. Do the right thing, here."

To be clear, WAMU is under no obligation to accept $100k as payment in full for $155k. In practice, they would be idiots not to.

WAMU takes the full hit as the junior lienholder. What's WAMU going to do? Call up BoA and say, "Misery loves company. Let's both share in the write down."? BoA doesn't care about junior liens.

I think this blog does a decent job of examining the short sale from the bank's perspective and might be useful for OP and others. Disclaimer: I don't know the blog author or have any interest in his endeavors.