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Do I have to be late to short sale my Sacramento home?

Im upside down despite the market surge. I have am debating a short sale. Do I need to stop making payments. 
  • August 07 2013 - Sacramento
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Answers (10)

Best Answer

You have a very good question and thank you for asking. During the beginning days of the mortgage crisis lenders would require a homeowner to be severely delinquent prior to considering workout solutions. Current guidelines and time have made short sale processing much more conducive. Short sales are handled case by case. It important you review your situation with a certified short sale agent. Several different hard ships may qualify you for a free short sale your agent can further explain.  In fact you do not have to be delinquent in some cases. I have closed short sales in which the seller never missed a payment. Look into HAFA program. Lenders are paying homeowners to mitigate losses. Sizable amounts from my experience depending on your lender. I Hope that helps good luck.

  • August 07 2013
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Call your lender and ask them...different lenders have different reuqirements.....best of luck
  • August 18 2013
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2012 I closed a Short Sale in Roseville CA 95747. Without saying too much the seller had medical cause for the short sale. They had to relocate for necessary care. It was approved in less than 30 days with a major institutional lender. The seller never missed a payment. Furthermore I was able to negotiate a Short Sale for a client that was forced to relocate outside the state. They never missed a payment either.

 Portfolio loans (loans originated and serviced by same entity) are much more likely to be mitigated liberally.  The key to success for homeowners when faced with difficult life events that force you to leave your home. Is to have an open minded agent willing to think outside the box and get the relief you and your family need. 

If you have a question about your mortgage call me. Ill respond promptly. We can work hand in hand to find a solution. It doesn't always equate to short sale.
  • August 13 2013
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Some lenders allow to do a short sale while you are current on your payments, some lenders will require that you are behind.
Also consult with your tax person for tax consequences in case you default on your loan.
If you need a referral, I know of an excellent broker in Sacramento.

Good luck
  • August 13 2013
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The answer is yes and the answer is no. It's very difficult to go to a lender and say, "Hey, I have a financial hardship and I can no longer afford to make my payments, but here is this month's payment and I intend to make the next payment, too." In fact, some lender's guidelines flat-out state the short sale cannot be approved if the seller is current. Other guidelines might allow borrowers to remain current.

If you don't have to be delinquent, there is no really good reason to stop making your payments -- except for the fact that you're throwing good money after bad and none of it is making a dent in any bucket.

However, if you are not making your payments, you can begin to save money to pay for first and last month's rent on a rental when you move out. On the other hand, if you are not making your payments, suddenly your net worth is much higher than it would be if you were paying the mortgage. All of that extra money in your bank account could disqualify you.

Every situation is unique. You need to speak with a Sacramento short sale agent who has closed 100s of short sales to get the exact answer to your personal situation. Otherwise, everybody is just throwing darts at you.
  • August 07 2013
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Supposedly no, you do not have to miss a payment. But I have heard of cases where a servicer has told the seller they need to miss. If you have qualifying hardship, you should not have to miss a payment. As Justin notes, there are a number of short sale programs available depending on who owns your loan (the investor). The fact that your home is underwater is not considered a hardship for a short sale. Keep in mind that a short sale is "debt settlement" and it does affect your credit and may keep you from purchasing a home for a period of years. The best thing you can do is find out what you qualify for by with a knowledgeable real estate agent. 
  • August 07 2013
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Profile picture for wetdawgs
No, you don't have to be late.  However, you do have to qualify by having a  hardship that can be documented.   Just being underwater is not sufficient to qualify for a short sale.

  • August 07 2013
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Justin that is good to hear.  I have a recent client that continued to make on time payments while trying to work with the bank on establishing a short sale, yet the bank stated they would not proceed until he was late on payments.  This is within the last year.  So they finally had little choice but to relent and miss payments.  Now that their home has sold they have to wait at least two years to buy another home per fannie mae guidelines.  So as you say it is a case by case basis.... it is nice to hear that some lenders are doing better than others. 
  • August 07 2013
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Elizabeth I don't think you answered the question?
  • August 07 2013
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This seems so convenient for you, Justin, that suddenly a question shows up out of the blue and 2 seconds later you are there with the answer. After midnight on a school night, even. You must have super powers.
  • August 07 2013
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