This great post by Judy in Florida inspired me to reblog it. I have had almost daily conversations with clients about loan modifications and/or short sales vs foreclosure and this is something that people are unaware of. Will you come out with perfect credit, NO. Your integrity about doing what you can to minimize the damage to the bank's investors (it's not the banks that we are hurting or helping, it's the investors behind the bank and some of them are the little people like us), and lastly minimizing the damage maybe to your own peace of mind and slightely less gastly credit when you are out of the woods are too admirable goals that might make it easier to sleep at night. I find most people are devastated themselves by having to go through these steps that are beyond their comprehension in more stable times. It's hard on the psyche for sure. Rest assured there is a light at the end of the tunnel. We just don't know how long the tunnel.
Whether you live here in Orlando FL — where the real estate market is a bad as it can get, house prices are undervalued 25% or more, and the market looks like it won’t recover for years to come — you do not have to default on your mortgage in order to qualify for a Short Sale.
You may have read articles on the Internet or received advice from well-meaning friends that to be approved for a Short Sale, you must first prove your hardship by defaulting on your mortgage loan.
This may have been true once for some banks, but not anymore.
While defaulting on your mortgage may support your already legitimate hardship claim, it isn’t a requirement. The fact that you are currently undergoing a hardship that will force you — very soon — to default on your mortgage loan unless you can first sell your house is the most important requirement.
If you want to find out your lender’s policy, call and ask. However, if the first answer you receive advises that you must first stop making payments to qualify for a Short Sale, ask to speak to a supervisor. If the supervisor advises the same thing, ask to speak to a manager.
Once you have an answer you feel confident with, make a decision based on your own circumstances. Understand first that defaulting on your mortgage loan can have more serious penalties than selling your house as a Short Sale.
Only if you absolutely cannot keep up with the monthly obligation should you stop making your mortgage payments.
- If you lost your job, then you can’t keep up.
- If you moved to another city and need to pay for housing there, then you probably can’t keep up.
- If you leased your house but the rent falls short of monthly cash flow, then you can’t keep up.
- If you’re borrowing from retirement savings, then you can’t keep up.
- If you’re racking up credit card balances and ‘loan shark’ interest rates, then you can’t keep up.
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WINTER PARK · WINTER SPRINGS · OVIEDO
DOWNTOWN ORLANDO · EAST ORLANDO
Baldwin Park · Delaney Park · Lake Eola
Orwin Manor · College Park · Thornton Park
Stoneybrook · Avalon Park · Lake Nona
Judy Chapman
Florida Licensed Sales Associate, REALTOR®
Coldwell Banker Residential Real Estate
521 E Mitchell Hammock Road
Oviedo, FL 32765
(407) 227-7763
© 2007-2009 www.activerain.com/blogs/OrlandoforSale by Judy Chapman ALL RIGHTS RESERVED. Portions of this content may be used with attribution.
DRE #00615420
Terrylynn has been a Realtor in Contra Costa County for over 30 years. She works with the Dudum Real Estate Group. Terrylynn is a local expert, who believes in specializing for better service to her clients. She gives talks on Foreclosure Alternatives, Make Home Affordable Programs, Home Staging Consults before you Sell, and is a Senior Real Estate Specialist, Real Estate Collaborative Specialist-Divorce, Certified Residential Professional, EcoBroker and any more. There is no silly question, call now for advice and counsel about your real estate investment. Click here for a question about the area. Visit www.BuyStageSell.com to learn more about Terrylynn and her team of Real Estate Professionals and Staging Professionals. We even stage our short sales! Why? Because it works. 925 8760966 www.BuyStageSell.com
Hi Terrylynn~ Thanks for re-blogging this. I was one that believed you had to be behind in your payments before they would consider a short sale.
Vickie, things seem to be changing on a daily basis, don't they. The rules of 6 months ago are no longer accurate. Thanks for the comment.
Thanks for the great info!
Joe Palacio www.thepalacioteam.com
Joe, you are welcome.
Joe, you are most welcome, I'll be reading some of yours too.