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Answers (3)
Best Answer
- Bob Hertzog, "Bob Hertzog"
- Contributions:23
At the end of the day, it doesn't matter how far "upside-down" you are on your mortgage. A short sale forces the lender to choose what is best for them, foreclosure or short sale. If they stand to make more money on the short sale, they will take this option. If not, they will foreclose.
- Greg Markov, "gregmarkov"
- Contributions:16
Loss severity (how much money the lender stands to lose) only comes into play when the servicer has conditional delegation of the loan. In other words, they are free to made their own decision only up to a certain percentage loss, and have to get additional approval from the investor beyond that. Otherwise, the only two number that matter in a short sale, is the amount of the offer, and the current market value of the house. If those two numbers "jive" well with each other, and you have a valid hardship - you should be able to get an approval.
We currently have a listing when the value of the house has gone down 66% ($360K owed, $120K sales price), and it is not an issue.
We currently have a listing when the value of the house has gone down 66% ($360K owed, $120K sales price), and it is not an issue.
- Michael Emery, "MikeEmery"
- Contributions:7298
It doesn't matter how upside down you are on your home. What is relevant to the lender is whether you can continue to afford to make the payments or whether you have suffered some hardship (loss of job, death of spouse etc) that prevents you from continuing to pay your mortgage.
Without proof of hardship, the bank will expect you to honor your commitment of paying the mortgage.
Without proof of hardship, the bank will expect you to honor your commitment of paying the mortgage.
How does a short sale work with upside down mortgage about 206%?
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