Currently Thinking Short Sale

we are current on all of our mortgage payments and have never been late. we have a 1st and 2nd mortgage. We are seriously considering a short sale on our home. Our goal is to cover the 1st mortgage but the second (w real estate what it is today) will not cover the second. If we handle the short sale and approach the bank with a buyer before ever having been late on payments will credit be effected or can we negotiate with them so that we can repurchase immediately after the short sale of this home.

Laurie

———

Hi Laurie,

In theory that could work and I’ll add that people have written in to the Broken Credit Blog with anecdotal evidence that it has worked.  However, there would need to be a compelling story the likes of cancer or death combined with five calls a day to the shorting lenders to get them to move and even then odds are extremely slim.

Buyers want to purchase in this market because they are getting a great deal.  Buyers also don’t want to wait more than 30-45 days to close.  Lenders do not want to discount loans unless they know it will otherwise be a foreclosure and lenders often prioritize short sales based on auction/sale date.

Add all of the above and factor that into the way I read your question and I’d say why not negotiate a loan modification with your lender?  As a general rule and in my personal practice (that’s my picture with the key to the right), short sales are for borrowers who were not able to secure an affordable loan modification.

Thanks for the questions and hope this helps.

Paul