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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: What happens to HELOC on a short sale? Posted by CC in OC on July 08, 2008 at 11:00 AM In Reply to: What happens to HELOC on a short sale? posted by Joe on July 08, 2008 at 10:23 AM I wouldn't sign a promissory note if I were you. Yes, WaMu is agreeing to short sales--just like every other lender out there. If the HELOC was a purchase money loan--meaning, you didn't obtain the HELOC after you bought the property--you'll be exempt from so called "phantom income" pursuant to the recently passed Mortgage Forgiveness Debt Relief Act of 2007. http://www.whitehouse.gov/news/releases/2007/12/20071220-6.html You should do everything possible--short of signing a promissory note--to facilitate a short sale, in my opinion. The seasoning for short sale--that is, the amount of time that must pass before you're eligible for a new institutional loan--is two years for short sale vs. five for a foreclosure. Here's the link to Fannie Mae's newly enacted guideline: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf Here's the pertinent portion: Establishing a new policy for preforeclosure sales. A preforeclosure sale involves the sale of the property by the borrower to a third party for less than the amount owed to satisfy the delinquent mortgage, as agreed to by the lender, investor, and mortgage insurer. Due to the increased incidence of preforeclosure sales, Fannie Mae is establishing a 2-year elapsed time period for reestablishing credit following completion of the action. It's really important that a short sale, rather than foreclosure, take place. Depending on the positive manner in which you manage your other debt, you can come out of this relatively unscathed if your good credit continues to supplant the bad credit created by your inability to carry out the terms of your Note with WaMu. Follow Ups: Re: new Fannie Mae's guideline G.O. 8:25 PM, 07/22/08 (2) Re: new Fannie Mae's guideline CC in OC 9:45 PM, 07/22/08 (1) Re: new Fannie Mae's guideline G.O. 11:37 AM, 07/24/08 (0) Post a Followup: Name : E-Mail : Subject : Comments: : I wouldn't sign a promissory note if I were you. Yes, WaMu is agreeing to short sales--just like every other lender out there. If the HELOC was a purchase money loan--meaning, you didn't obtain the HELOC after you bought the property--you'll be exempt from so called "phantom income" pursuant to the recently passed Mortgage Forgiveness Debt Relief Act of 2007. : http://www.whitehouse.gov/news/releases/2007/12/20071220-6.html : You should do everything possible--short of signing a promissory note--to facilitate a short sale, in my opinion. The seasoning for short sale--that is, the amount of time that must pass before you're eligible for a new institutional loan--is two years for short sale vs. five for a foreclosure. : Here's the link to Fannie Mae's newly enacted guideline: : https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf : Here's the pertinent portion: : Establishing a new policy for preforeclosure sales. A preforeclosure sale involves the sale of the property by the borrower to a third party for less than the amount owed to satisfy the delinquent mortgage, as agreed to by the lender, investor, and mortgage insurer. Due to the increased incidence of preforeclosure sales, Fannie Mae is establishing a 2-year elapsed time period for reestablishing credit following completion of the action. : It's really important that a short sale, rather than foreclosure, take place. Depending on the positive manner in which you manage your other debt, you can come out of this relatively unscathed if your good credit continues to supplant the bad credit created by your inability to carry out the terms of your Note with WaMu. [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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