What do I tell the bank?
July 11, 2012 5:35 PM Subscribe
Should I be honest with my big-4 (USA) bank when it calls to find out why I haven't paid my mortgage? I'm selling the house and need the $ for rent.
I'm divorced. We tried to sell the house when we first separated a year+ ago, but the market was down & we would have had to sell short. Now, miraculously, inventory is low, there's high demand (SF Bay Area) and I want to move to the nearby town where my kid's enrolled in school.
I've rented an apartment in that town & signed a listing agreement-- the house goes on the market in early August. I haven't made my July mortgage payment yet (not late until July 15) and don't plan to make my August one. If (big if) market conditions hold, the house will at least be in escrow by Sept 15.
If it doesn't sell in the black, we'll ask the bank for a short sale. The agents have experience with that. For a short sale you need a hardship (divorce) and often to be behind a bit anyway.
What do I tell the bank when they start calling about the missed payment(s)? Dissemble and say I'm "broke" or be honest about selling? They might start bugging my ex-wife too. She could honestly say that I've been making the payments for the past year & doesn't know what's going on with me.
I honestly am "broke" in that I don't have the funds to either 1) furnish the house appropriately for it's (nutty, but it's the Bay Area) supposed value 2) move out to show it empty ("move in ready!"), keep paying the mortgage and rent a place also.
I have a small 2nd (that's officially a HELOC, not a mortgage) that I'll keep paying.