Short sale? What professional advice do I need?
July 9, 2011 5:46 PM   Subscribe

How do I evaluate the impacts of a short sale to determine if it is right for me? I would like professional advice from someone with an ethical if not fiduciary duty to me, be it a nonprofit consumer counseling agency, financial planner, or an attorney (what kind?).

I'm hoping to find someone up to date on the regulations, familiar with Bank of America and how hard the process will be, able to tell me if I qualify for HAFA or other federal programs, and able to evaluate the documents I signed to get the loan.

I want to know what the final settlement might look like, how long it might take, what its success would depend upon, what the credit hit would be, what the impact on future mortgage options would be, and how I should manage my money in the meantime. In an ideal world, they could help me comparing the SS to the feasibility and financial and legal risk of one or two other scenarios. But the most important thing is SS (and mayhe foreclosure) expertise because I've gotten advice on the other paths already.

I'm willing to pay for good counsel, but only if it's truly worth it. I'm extraordinarily broke, except for a tiny emergency fund, but getting out of this situation in the sanest way possible is the kind of thing the emergency fund is for. I'd like to not spend much and make sure that what I get is worth it.

I have discovered that many realtors claim to specialize in short sales and offer this information but are not disinterested. (They would like to make money via the sale whether or not it has a bad credit impact on me. They seem to be downplaying risks.) I certainly do not trust the bank to protect my interests. I do already have an attorney who is good at contracts, so if only one or two of these questions require legal help, I could get that from him.

I need advice specific to my situation but would also be interested in general educational materials. Are there helpful books, articles, or websites on this topic? Most of what I have been able to find is from content farms or realtor ads.

I am in California -- the San Francisco Bay Area.
posted by anonymous to Work & Money (3 answers total) 3 users marked this as a favorite
Start at, take the forums with a grain of salt but there is some reasonably good information there.
posted by iamabot at 11:20 PM on July 9, 2011

It would seem like a bankruptcy attorney would be the best source of information here.

And possibly your bank. If you are far enough into your loan, and not TOO far upside down on value, they might find it expedient to let you refinance to a longer term rather than take the loss of a short sale.

I believe a short sale affects your credit almost as badly as a foreclosure.

General advice would be to look at your budget and play it out. If you short sale, how much will it cost? What is your monthly payment versus what you'd have to pay in rent? Are you cool with renting for the next 7 years until you can get another loan? If you are going to end up sapping your emergency fund anyway, will you be better off unloading the property, or sucking it up for a couple more years until prices/pay goes up?
posted by gjc at 9:59 AM on July 10, 2011

My dad is a realtor in the SF Bay Area (more Napa/Solono/Sonoma, but he's got contacts in other areas around the bay) and would be willing to do a free consultation from the real estate standpoint. He's done tons of short sales (from both sides of the equation), and knows a hell of a lot about it.

It's not exactly what you're looking for, but if he could give you a piece of the puzzle, it may help.

Memail me and I'll give you his contact details if you're interested.
posted by guster4lovers at 10:51 AM on July 10, 2011

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