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I bought my home through the USDA Rural Development program. I am now trying to sell it, it has sat on the market for almost 6 months, I owe $160,000 and it seems every other house in my block is going for a foreclosure or short sale, driving the worth of my home down. I'm just wondering if anyone out there has ever sold their USDA financed home as a short sale and what the process was like, and was the "short" amount fully forgiven? In general on short sales is the "short" difference amount fully forgiven?
I have researched and researched until I'm blue in the face and am still so confused when it comes to short sales. I have a USDA RD financed home and am looking to sell it as a short sale. I was told the first thing I must do it is get an appraisal. Got that scheduled! So then what happens? Do they approve me for a certain amount? Or do I have to re-list the home for the appraised value and find a buyer first, and then turn to them to approve or deny? And how long could that take? (Not to find a buyer, I know that differs, but from the time I get an offer until the USDA accepts it?) Please if you can give me any clear standards as to how the short sale process works, as in the sequence of events that take place from start to finish, it would be GREATLY appreciated! TIA!
My agent contacted my lender and they told her that we had to get the appraisal. The USDA-RD program is probably very different from a traditional mortgage holder/bank, which is why I'm so clueless as to what their specific steps are, many people have never even heard of the program.
In my experience with borrowers, they will send you a number of forms to fill out and submit. There is a hardship letter, describing your situation, a financial statement, a 3rd Party Authorization (if you already have a realtor who will list it) among others. It all starts with the lender to my experience.
Go to their website and see if they have a link for "distressed" or "short sale". YOU contact the lender directly and go from there.
Write everything down including the name of the person you talk with each time, getting their fax# and email address Follow up every conversation with a summary as you see it, and email or fax it to that person.
You need to consult with an accountant and an attorney. The accountant right away....The Mortgage Forgiveness Act expired 12/31/2012. I have not heard that it has been extended. What this means - if your payoff is short, say $25,000, your lender can do 1 of two things......file a judgment against you for 25K, or, issue you a 1099 for 25K (as income) so you can pay taxes on the amount written off. HOWEVER.....a USDA is an insured loan and the mortgage insurance will reimburse your lender for a portion of their losses, bringing that shortfall down.
Hopefully, you have an experienced agent in place, that has an experienced title company to negotiate the short sale. This is one time experience is everything.......the last thing you need is a rookie or a part time agent.
Thanks for the responses. I do have the Direct loan, it was 100% financed at 1% interest. I will be calling them myself Tuesday since its a 3 day weekend because of the holiday, but I'm just too impatient and thought I might find someone on here who's been through this situation and could help give me some insight as to what to expect. But my agent did contact them and they said get an appraisal. This agent isn't very good with communication and always seems in a rush and leaves me with unanswered questions and confusion.
Thanks for the responses. I do have the Direct loan, it was 100% financed at 1% interest. I will be calling them myself Tuesday since its a 3 day weekend because of the holiday, but I'm just too impatient and thought I might find someone on here who's been through this situation and could help give me some insight as to what to expect. But my agent did contact them and they said get an appraisal. This agent isn't very good with communication and always seems in a rush and leaves me with unanswered questions and confusion.
Then try to find one with experience with your situation. Short sales are a royal pain in the okole even when you do know what you're doing!
I've read about this program. My impression was most houses sold using these loans would drop in value and potentially face foreclosure.
Debt relief has been extended on short sales through the end of 2013.
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Short Sale Basics, Please help!!!!
