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Our bank told us that in order for them to even consider approving us for a short sale, we must stop paying our mortgage for 3 months (we understand the impact this has on our credit). What we don’t know is once we are approved for a short sale, do we start paying the mortgage again or a portion of the mortgage? I would think if we stop paying, the bank would foreclose on us. What’s the difference between not paying in a short sale and not paying in a foreclosure?

Thanks for your help!

4 Thoughts on Do you still make mortgage payments when going through a short sale?
  1. Reply
    goz1111
    December 12, 2012 at 2:01 am

    Your lender is placing you in a no win situation

    the lender will not considered a short sale if the loan is conforming ie you are up to date with the payments

    your problem: stop making pavements means penalty fees add up, then if the short sale fails for one reason or another you will be so far in the whole in owing the lender monies you may not be able to bring the loan current with penalties, fees and loan payments, thus having the lender forecloses upon you

    Majority of short sales fail

  2. Reply
    the kid
    December 12, 2012 at 2:32 am

    What they are saying is that they won’t do a short sale unless you can’t pay. The only way you can show you can’t pay is if you don’t.

  3. Reply
    rswpbc
    December 12, 2012 at 2:54 am

    Do you need to walk away from your home or can you honestly afford it? Many homeowners are mistakenly thinking that a short sale means they will be able to sell them home fast and make money doing it. In reality, this isn’t true. You need to know the difference……….

    Your lender will not approve a short sale unless you are behind in payments. Sometimes this means one payment or more likely at least three payments behind. You would need to send a hardship letter and really convince them that you are going through tough times.

    You might want to think about asking for a loan modification which the bank most likely will approve in your case. You actually can have 4 loan modifications through out the life of the loan but only one a year.

    You would not be making a regular mortgage payment during a short sale or if your home is in foreclosure.

  4. Reply
    real estate guy
    December 12, 2012 at 3:25 am

    This doesn’t make sense. I would talk with someone else in the bank. A manager.

    The reason for a short sale is to find a buyer that is willing to buy the house. The amount it will sell for is less then is owed. The bank will allow a short sale or less for the house then is owed and will eat the difference. The positive for the bank is that while they lose money, they don’t get the house back and trashed. Nor do they have additional costs and they still receive their on time payments.

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