Short Sale/Foreclosure Advice-HELP!!! (PMI, loan, real estate, non-recourse)

[kbw205]

I am currently in the middle of a short sale. My bank is willing to accept the offer. However, in order for them to accept the offer I must sign a promisary note that states I will pay them $10,000 (payable at 0% interest for 10 years) for the PMI. They refuse to budge on this. My loan did not have pmi attached to it. Even though I did not put 20% I did not have to pay PMI.
At this point I have two options: pay the 10k or walk away. My credit will be toast either way. I have no desire to purchase another home for awhile.
What is the best choice at this point?

[aneftp]

Originally Posted by kbw205

I am currently in the middle of a short sale. My bank is willing to accept the offer. However, in order for them to accept the offer I must sign a promisary note that states I will pay them $10,000 (payable at 0% interest for 10 years) for the PMI. They refuse to budge on this. My loan did not have pmi attached to it. Even though I did not put 20% I did not have to pay PMI.
At this point I have two options: pay the 10k or walk away. My credit will be toast either way. I have no desire to purchase another home for awhile.
What is the best choice at this point?

Just a word of advice. Consult a real estate attorney on this matter.

Depends on your state, but the banks can put a deficiency judgement on the amount you owe them.

How much are you "shorting the bank" Is it 50K or is it 10K?

The short sell law is only temporary and will expire Jan 1st 2011. It's a crappy law because people feel "entitled" to not owning up to their loan obligation.

So get an attorney, don't sign any paperwork. It really depends on the state you live in and whether the bank is nasty and can go after any future assets you may have.

[Modification Specialist]

Originally Posted by kbw205

middle of a short sale. ...sign a promisary note that states I will pay them $10,000 (payable at 0% interest for 10 years) for the PMI.

$10,000 x 120 mths x 0% = $83.33 monthly PMI

You possibly have another option.......

I brought my home in 1992, when I refinanced in 2002 found out I was still paying PMI....... The bank (Wamu) said it was my responsibility to notify them my value went up, reflecting more than 20% equity.

Conforming loans, PMI can be removed once the owner has more than 20% equity. Sounds like go got a good deal on the short sale - wait it out as the value returns, so you yourself can remove the PMI.

Be sure it is stated in the paperwork..........


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[kbw205]

I live in Arizona. I believe that this is a non-recourse state. I am beyond frustrated. I had lost my job (residential construction manager) in January. I had tried to get the bank to work with me way before that knowing that there was a possibility of a layoff. I have informed the bank of everything through out this ordeal.
I tried to do a modifciation but did not qualify. Tried to do a refi but did not qualify. I have fought to keep the house. My husband and I were told to be out by a certain date and complied by renting an apartment. So now at the eleventh hour the bank says that they need an additional 10k to approve the shortsale. We bought for 195k and the offer is 65k.

[MotleyCrew]

We are also tied to the construction industry in AZ and know how hard it has hit this state. I do feel for those who were caught up in the downturn and lost income and homes. The people who started the domino's falling were the ones that selfishly walked when they had good jobs just because they owed more than the house was worth and these actions collapsed an economy.