I blogged on my Wall!

Readers in short sale distress contemplating Bankruptcy afterwards,

If you are in the throes of a short sale, and if you plan on filing for bankruptcy.  Would you PLEASE discuss this with your REALTOR BEFORE you file, ESPECIALLY if there is a patient buyer and professionals working on your behalf who may not be privvy to your financial hardship, understand or begin to know the extent of what financial ruin you are truly in or about to become mired in.  Unfortunately,  I have a buyer placed in this position and I understand that unbeknownst to all parties the seller received a garnishment and decided to file for bankruptcy to stop the garnishment due to employment considerations etc. That is understandable.  But after a 3 1/2 month wait, negotiations etc. and almost at the finish line, Buyer paid fees etc. The seller does not mention this to the Realtor nor any of the parties involved until after the filing and this home can be held exempt from the bankrupty filing, if filed correctly! 

Now we all (except the seller I am sure) are hoping that it is NOT too late as this was just done and perhaps this can be reversed.  But I am here to tell you, to file bankruptcy, please for everyone involved, if this is in your plans a short sale is NOT,  repeat NOT, for you!  And it is NOT fair to the Buyer/s, Realtor/s, title companies, all the folks involved to keep you out of a foreclosure or further ruin, by keeping this a secret or mum about filing, the bank you have a loan with knows that you filed. 

Therefore,  four succinct words comes to mind immediatley...HOW SELFISH of you!!!  This is one of my short sale rant days, but felt it important to share, decisions made like this without preparing all parties that is unacceptable.  This is why it is wise, prudent and helpful to seek the advice of an attorney if you are going down the road to financial hardship in advance to placing your home on the market. Filing bankruptcy and a short sale does not go together, not a marriage if you will.

 If your debts are crowding you in a corner, and it includes much more than just your home, again seek advice or in this case, the home can be dealt with outside of including it in a bankruptcy as a bankruptcy does not exonerate all debt. Perhaps it is not too late!  Make sure you give considerable thought to putting your home on the market, this effects the lives of other people as well as including your own. The next thing we will have to put in a contract is full disclosure of intent?  The days of closing fast are few and far between a rock and a hard place.  For everyone involved, including yourself, please be considerate and don't do to others what you don't want done to you! Remember, hindsight becomes 20/20 in your rearview mirror when you have your pedal to the floor!

Let me share what a fellow realtor seasoned in short sales commented on a blog for Realtors ...

"By having your seller walk away from the short sale, they put themselves in a position to get foreclosed, where they lose the property BUT STILL OWE THE MONEY! What would you rather have-Owe the full amount plus interest and legal fees and have to go BK to stop a judgment, wage garnishment, or collections harassment, or sign the note and only owe the balance of the note?

Further, how do you think a BK judge will react when you try to cram a full mortgage loss into a BK instead of a small note?

As for how MI or investors have the right to come after you, you must be really uneducated regarding your industry to even ask that question. This is basic, basic knowledge. When you sign a mortgage and note, you give full collection rights to the lender and any and all servicers and investors of the debt. If there is a loss and MI pays a claim to the investor, MI will move to collect that loss just like a credit card or any other consumer creditor would. Thanks Joseph Alfe for this comment as it ties in with my blog headline~! Taken from our Short sale specialist network group.

BK = Bankruptcy   MI= Mortgage Insurer or Insurance

Enjoy your week!