Peter & Mary, Chicago, IL
Peter & Mary purchased a beautiful newly constructed one bedroom condominium in the River North neighborhood of Chicago in 2006. The bought directly from the developer, and paid a total of $290,000 for the unit including one deeded garage parking space and some upgrades. When they purchased the home, they put 5% down and financed the purchase with a first mortgage for 80% of the purchase price and a second home equity line of credit (HELOC) for 15% of the purchase price.
In 2009 Peter and Mary had their first child and were relocating to another city. With their imminent relocation and the added financial responsibility of parenthood, they needed to sell their home. Unfortunately given the state of the real estate market, Peter & Mary knew they wouldn’t be able to sell their home and pay off the $227,000 balance on their first loan with Bank of America, the $44,000 balance on their HELOC with JP Morgan Chase, their past due homeowners assessments, past due property taxes, and all closing costs associated with the transaction. They would either have to fund the transaction with money they didn’t have, or attempt a short sale.
Peter and Mary enlisted us to handle their short sale. We found a purchaser who bought their condo at the current market value of $232,000. $196,000 of this went to fund a portion of the first loan with Bank of America, and $6,500 went to fund a portion of the HELOC with Chase. The balance covered past due assessments, past due property taxes, and traditional closing costs associated with a real estate transaction. On behalf of Peter and Mary, we negotiated a lien release and forgiven deficiency from Bank of America and Chase. Peter and Mary have now moved on with their lives and have no future financial obligation to their lenders.