i have been trying to help my aunt with a short sale on her home. The house will sell for about $30,000 less than the mortgage because the house needs work. The mortgage lender, Flagstar said they will allow the short sale but will require my aunt to sign an unsecured loan to pay the $30,000.

I thought that a short sale ment that all shortage was extinguished? What are others doing to aviod payment the shortage on their short sales. Is the bank just being tough with me?

Maybe my aunt should just go through foreclosure. Any advice is appreciated.

The key to a short sale transaction is to make sure the bank accepts it without recourse. If its with recourse, then you will sitll be liable for the remainder. The is the trick to making these things go away without a whole lot of fall out.

my brother did a short sale and the bank made him sign for the difference otherwise they would go after his business assets. Is the bank threatening to go after your aunts assets? Does you aunt have other assets other than her home?

The recourse versus no recourse issue, do banks generally agree to do a short sale without recourse? I mean what is there incentive, how do you convice a bank of something like this, bassically, why would they do it and how to i convince them?

Your first goal is to convince the bank that she does not have any real assets and that if the short sale w/o recourse is not approved the house will go into foreclosure. and the banks are really tired of taking on houses adn paying the property taxes adn maintaince costs on them. If she has a lot of assets, your going to a problem with this, but that is the general theory.

I helped my sister in law through this, the banks will do it these days, especially if they think its a house where they are going to be stuck with it for a long time and have to pay the property taxes on it. They just have so many to deal with these days, they are becoming much more flexible.