Cash is King – Upside Down Mortgage Solutions

June 6, 2008

Short Sale: Should I just let my home go to Foreclosure?

Here is an email from a reader…… 

On 6/3/08 4:24 PM, 

> Name: Jake 

> Ok here is my situations.  I have perfect credit and I am current on 

> everything right now.  I lost my job a few weeks ago and went from making 

> 70,000 a year to about 35-40k a year.  I also lost insurance through my 

> company and now have to pay COBRA because my wife is pregnant.. We bought our 

> house at the peak of the market and then took a home equity line out to do 

> some thing things around the house.  We escrow our taxes and insurance and it 

> comes out to be about 1900 dollars a month just for our house.. So far I have 

> made the payments but I dont think I will be able to continue to make these 

> payments.  I have about 30k in Credit Card debt.  My how is worth about 

> $173,000 dollars and we owe the one bank 173,000 and we also have our HELOC of 

> 60,000 … Is a short sales possible for us? Should we just walk away and 

> forclose?

> Time: Tuesday June 3, 2008 at 11:24 pm

Hey Jake!

Well my friend it looks like you are in a bit of a spot!

I know the feeling as I have been there before!  Remember on thing, it’s how you handle the situation that shows your true character.

Here is the only thing I want you to take away from this email, TAKE ACTION!  Being in your position, time is money and from the sound of it, with baby on the way, you have to make good decisions for 3 people.  

First things first:  GET THE HOUSE ON THE MARKET!

    Yes you should do this IMMEDIATELY but you can’t just grab the run of the mill Realtor and expect good results.  As my article shows, it is important have someone who knows what they are doing.  If you don’t you will find that you may lose your home to foreclosure and wasted time and energy on something you could have controlled.  I can make it easy on you…..

I work with a group of professional Realtors who have different specialties so finding the right one for you will be easy for me if you would like some help making choices.


    There may be a tax implication to your short sale but my guess is that you should be just fine.  The law changed regarding short sale implications but there are a set of rules you need to follow.


    Inform them that you are listing the home and that you are going to be short selling.  The hope here is to get an offer to buy your home ahead of you missing payments on your mortgage.  This works with certain banks, but it comes down to the decision maker you are assigned to at the bank.


    There is no reason at this point to price your home at any thing less than a price that will demand multiple offers coming in from potential buyers.  If your CPA agrees you should have limited tax implication for a short sale and from a credit standpoint the impact should be the same whether you settled at $10K less or $100K less than you owe.


Go with a truly professional Realtor and price your home to sell in 14 days or less and you should be well on your way!

I am more than happy to send you a referral to an agent I feel best fits the qualities you need to complete this transaction.  Otherwise, I hope this helps!  Let me know if you need anything further.

Brent Lane

The Lane Group



  1. What about the 60,000 Heloc????!!!

    will the bank tell him thats ok.. you dont have to pay that back… ???

    Comment by mike — July 8, 2008 @ 5:51 pm | Reply

  2. Depends on the situation and the lender on the HELOC. Not all Lines of credit need to be repaid in short sale situations. If the transaction is done correctly the second and first mortgage companies would work together to come up with an agreement and the second would settle the account!

    Hopefully it worked out for him.

    Comment by brentlane — July 9, 2008 @ 6:57 am | Reply

  3. Why are there so many foreclosures???

    We all know by now that most foreclosure prevention companies are doing what any homeowner can do themselves. Stopping foreclosure is easy, if you know what to do. Wow! Knowledge “is” Power huh?

    Comment by Kevin — August 19, 2008 @ 1:31 pm | Reply

  4. will his credit get screwed up if the short sale is done?? does it have the same ramifications as a foreclosure when it comes to his credit??

    Comment by steve — February 3, 2009 @ 10:48 pm | Reply

  5. at one point in our life we will always have some bad credit because of some unpredictable factors ::

    Comment by Sweetie Bracelet : — October 31, 2010 @ 7:54 am | Reply

  6. I am very thankful to this topic because it really gives useful information :.’

    Comment by Gastrointestinal Problems — January 24, 2011 @ 12:46 am | Reply

  7. Hello there! This article could not be written any better!
    Reading through this article reminds me of my previous roommate!

    He continually kept preaching about this. I will send this post to him.
    Pretty sure he’s going to have a good read. Thank you
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    Comment by blurum bot — June 12, 2014 @ 12:10 pm | Reply

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