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Profile picture for tarastiles

If I decide to stop paying my mortgage, does that mean mortgage and eschrow, or mortgage only?

We're attempting a short sale due to a job relocation.  I've been advised by one attorney to stop paying my mortgage, and by another to continue paying my mortgage.

If I stop, should I quit paying everything: mortgage, pmi, taxes, and home insurance?  Or just the mortgage itself?

What happens if I pay mortgage only, but not any of the eschrow? Wouldn't that be considered I'm paying my mortgage, and therefore, I would not go delinquent on payments?
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February 03 2012 - Jacksonville
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Answers (7)

If you maintain your mortgage payments you can do a short sale with very minimal impact to your credit scores, if any at all. If you do not make your mortgage payments then your credit will be affected by how late you go on those mortgage payments. The short sale may report as "settled for less than full amount" on your credit report but that comment doesn't hurt your score by itself, as I've helped people who have had a short sale who never went late on the mortgage and their credit score remained the same before and after the short sale. Commonly banks will only do a short sale of the borrower has been late on the mortgage, but not always, as in the situation where your employment is moving I have seen them approve short sales without going late. The key is to make sure all of your mortgage payments and other debt obligations have been paid on time and you will be eligible to buy a new home right after the short sale with FHA financing.
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May 07 2013
Profile picture for AdamsHolzhaus
You guys are idiots.  Look dude, do what your heart tells you to do.  Do you choose to stop paying all together or do you continue paying?????  Only you can answer that, not these douchbags.
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May 07 2013
To voluntarily stop paying a mortgage is just bad advice.  The purpose of the short sale is to help you out of the situation.  With the money the lender will lose on the sale, the least you can do is to continue paying until a buyer is found.

As mentioned below, if you stop paying, you will not be able to purchase for 3 years.

Technically, you can pay your escrows on your own directly to the county and/or the insurance company.  The lender may also keep insurance on the property to protect their interests in the property.
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February 11 2012
Profile picture for wetdawgs
Hopefully your attorneys both advised you that if you don't pay the mortgage plus escrow, you will have a longer wait until you can purchase again than if you keep payments up.  
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February 03 2012

Your bank will not accept a partial payment, so if you are escrowing and you want to continue paying your mortgage you'll have to pay the entire amount.

Something to consider in your decision.  The typical minimum waiting period to return to the mortgage market after the closing of a short sale is 3 years.  We have programs now that will allow certain borrowers with previous short sales to enter the market quicker, but they cannot have any late mortgage or installment payments the 12 months prior to the short sale.

Just food for thought . . .

Good Luck

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February 03 2012
You're responsible for paying your mortgage!!! Just because you're relocating for a new job, that isn't an excuse not to pay.......unreal!
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February 03 2012
Profile picture for shapiroamg
If you have an attorney, you should be discussing this with him/her.
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February 03 2012
 
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