What is a "short sale"?

[waterst1]

I don't know, but I can't have him arrested. The bank will probably have to end up dealing with him if I don't pay his part!

 

[SHELLY]

I don't know, but I can't have him arrested. The bank will probably have to end up dealing with him if I don't pay his part!

Didn't you have a partnership contract?


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[waterst1]

Yes, we have one but all it really does is give me the rights to kick him out and take the debt, but the property is worth about half of what we paid of course.

 

[SHELLY]

Yes, we have one but all it really does is give me the rights to kick him out and take the debt, but the property is worth about half of what we paid of course.

Well then, you kicked him out and took on the debt--so you can say the contract did its job.

His name doesn't appear on the deed...right?

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[waterst1]

The deeds in an LLC but we both signed the mortgage, jointly and severably of course...so I'm hoping for my first short sale. I've never wanted to loose money so badly. I can't believe I'm saying this...

 

[Pirate]

There are other reasons, besides character, that a person may choose a short sale and live up to the terms. The lender generally isn't just going to let you walk away from the difference between what they end up selling your property for and the loan balance. You will be hounded for at least 10 years and unless lenders have another loan-a-thon you will not get credit for a candy bar. There is a good chance one could not keep any type of checking/savings account for that same period due to the distinct possibility of a lien on a current account and credit requirements for a new one. Individuals that are employed may also find their paycheck reduced by a substantial amount through a garnishment. Additionally, the borrowers other assets may be sought through the courts.

 

[Smiling JOe]

Pirate, thanks for adding the valid point above. I thought I mentioned the decent credit, vs lousy, or no credit, but it probably got lost in the math. Credit is a very important thing in today's world, especially if you cannot pay your bills.

 

[SHELLY]

There are other reasons, besides character, that a person may choose a short sale and live up to the terms. The lender generally isn't just going to let you walk away from the difference between what they end up selling your property for and the loan balance. You will be hounded for at least 10 years and unless lenders have another loan-a-thon you will not get credit for a candy bar. There is a good chance one could not keep any type of checking/savings account for that same period due to the distinct possibility of a lien on a current account and credit requirements for a new one. Individuals that are employed may also find their paycheck reduced by a substantial amount through a garnishment. Additionally, the borrowers other assets may be sought through the courts.

So you're saying there is a risky side to real estate investment?

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