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I have read conflicting information on this and I guess it just depends on your bank but just thought I'd throw this question out here for anyone who has been in a similar situation if you could give me your feedback. I am not delinquent on my mortgage and don't want to ruin my credit by purposefully becoming delinquent just to qualify for a short sale. I have had major life changes since buying the house and it is worth less than what we owe, I need to move and will not be able to afford the house much longer due to personal circumstances, but can't sell for what I owe so I'm going to try to get a short sale. I have a unique mortgage from the USDA-Rural Development. So just wondering if anyone knows if it is possible at all to qualify for a short sale without being delinquent on mortgage payments? Also does anyone know if I were to get the short sale and having never been delinquent on payments, would that lessen the impact on my credit score? I have excellent credit, anyone who's been through a short sale, how much did it impact your credit rating? Sorry for so many questions and thanks in advance for any incite you have!
I have few people I know with very similar situation (never been behind on payments. great credit score) and their lenders (Chase, BoA) didn't even look at their short sale packages before they were late at least 30 days.
After that it really depends on how many lenders you have.
As long as you are behind on your payments, as worse your credit score is getting.
YES, you can be approved for a short sale without missing a single payment! Don't listen to people saying you need to miss a payment. You need to get with someone who works short sales and knows what they're doing. The biggest part of getting approved is showing your hardship and how your future ability to make payments has diminished. You say it has, so you have to prove it.
Many times, it's not about getting an agent who knows what they're doing, but getting an attorney who knows what they're doing... AND their fee is covered within the closing costs of the short sale so you don't pay it out of pocket.
Yes, you can qualify for a short sale if 1) you owe more than the house is worth, and 2) you show a hardship and how it will affect your ability to pay future mortgage payments.
The blow to your credit score will be roughly the same either way, but one way I have seen it benefit the homeowner is the fact that banks will be open to lend again in roughly 2 years, rather than 3+ years for people who had missed payments and fallen behind before initiating the short sale.
YES, you can be approved for a short sale without missing a single payment!.
per our real estate lawyer it's not true and his office is not even sending short sale packages to lenders before payment is past due for at least 30 days. He said they tried it and it never worked and his firm is the largest in our area.
Somehow I trust lawyer...
per our real estate lawyer it's not true and his office is not even sending short sale packages to lenders before payment is past due for at least 30 days. He said they tried it and it never worked and his firm is the largest in our area.
Somehow I trust lawyer...
No offense, but I've closed short sales where a seller never missed a payment. Your lawyer is lazy if he doesn't want to do the work.
No one should advise you to miss a payment in order to qualify for a short sale. (I say this because some agents will tell you that) I have done short sales both ways.. with no late payments and when current. I will tell you that there are lots of different scenarios that may or may not come up. All banks are different in what they require in order to approve a short sale.
For example.. one client that had not missed a payment but needed to move out of state for a job was told that unless he was 60 days late or he had to show the house had been listed on the market for 60 days at the payoff price.. SMH on that one...
Another example.. one client had not missed a payment but her husband was being laid off the next month and they knew they were in trouble with finances, etc. Their house had lost 50% value. They also had a HELOC. They were able to prove hardship and were approved for the short sale, but the HELOC held everything up because they wanted money since apparently the people were still able to pay their mortgage.
By the way.. your credit will take a hit from the short sale anyway.. I was told by a mortgage person that the difference between a short sale with late payments and without was about 20 points. I have no idea if that is accurate or not.. It's a guessing game.
Does anyone know what kind of lawyer to look for? Or what kind of real estate agent? I'm located in the Lehigh Valley of Pennsylvania (Allentown) and my house that is up for short-sale is in the Poconos (Saylorsburg). I am in the midst of looking for a new agent since I didn't have many showings with my past agent. One new one that I looked at (DLP Realty) is a group and they will charge me $2495 up front to list the house. $1500 of it goes to retain a real estate lawyer.
I would call local real estate lawyers and ask for free consultation. Go to each and talk to them, listen what they are going to tell you, ask their price and terms and pick one. The lawyer will be able to connect you to the agent he/she works with and has experience.
Good luck!
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