Posted on: 24th Mar, 2009 11:26 am
in the fall, my husband's hours at work were drastically cut. after that, we became behind in our mortgage payments (as well as other bills). at rock bottom, we were 2 and a half months behind in payments on our house. i was in talks with the loss mitigation department at our bank, and after submitting my hardship letter and other paperwork, the bank decided that we did not qualify for a loan modification because we make too much money. earlier this month, we received our tax refund check and were able to become current on our home mortgage. our credit had already suffered though. now we are seperating, and i know that i cannot afford to continue to make payments on my own. we owe more on the house than what it is currently worth. should i try to short sale it or consider a dil? will we even qualify when we are current in our payments?
Hi christyhopson,
If you can short sale the house, that would be good as it will not hurt your credit as much as a deed in lieu or a foreclosure. But you will be rquired to pay any deficient amount arising out of the short sale. A deed in lieu, in comparison, would hurt your credit almost as much as a foreclosure. But the deficient amount would be forgiven by the lender. Usually, lenders are not willing to a short sale or a DIL, unless you are behind on your paymnets by 3-4 months. But, if you can convince them through a hardship letter, you can qualify for either a DIL or a short sale.
Thanks,
Jerry
If you can short sale the house, that would be good as it will not hurt your credit as much as a deed in lieu or a foreclosure. But you will be rquired to pay any deficient amount arising out of the short sale. A deed in lieu, in comparison, would hurt your credit almost as much as a foreclosure. But the deficient amount would be forgiven by the lender. Usually, lenders are not willing to a short sale or a DIL, unless you are behind on your paymnets by 3-4 months. But, if you can convince them through a hardship letter, you can qualify for either a DIL or a short sale.
Thanks,
Jerry
Jerry,
Thanks for your advice. I think I will be hiring a real estate agent and putting my house on the market. I will hope for the best, but in all likelihood I will be looking at a short sale. Should I purposely let myself fall behind in payments so that I can qualify for a short sale? It seems wrong to me, but I know that in the very near future I will be falling behind again anyway.
Thanks!
Thanks for your advice. I think I will be hiring a real estate agent and putting my house on the market. I will hope for the best, but in all likelihood I will be looking at a short sale. Should I purposely let myself fall behind in payments so that I can qualify for a short sale? It seems wrong to me, but I know that in the very near future I will be falling behind again anyway.
Thanks!
Hi chopson,
I don't think you should deliberately fall behind on your payment. This will get reported to the credit bureaus. First try and negotiate with the loss mitigation dept., send them a hardship letter and if nothing works, you can stop making payments to initiate a short sale.
I don't think you should deliberately fall behind on your payment. This will get reported to the credit bureaus. First try and negotiate with the loss mitigation dept., send them a hardship letter and if nothing works, you can stop making payments to initiate a short sale.
FYI -- My lender (Wells Fargo) will allow me to go through a short sale without having late payments.
A lot of information is contradictory, so you'll have to do a lot of homework to get the right idea of what will happen. Good luck -- I'm in the same boat too!
A lot of information is contradictory, so you'll have to do a lot of homework to get the right idea of what will happen. Good luck -- I'm in the same boat too!
Hi
It entirely depends on the lender whether they would allow a short sale before you fall behind on your payements. Some lenders allow it even though you are current on the loan, provided you can convince them that any future difficulty can befall you, due to which you can fall behind on your payments.
It entirely depends on the lender whether they would allow a short sale before you fall behind on your payements. Some lenders allow it even though you are current on the loan, provided you can convince them that any future difficulty can befall you, due to which you can fall behind on your payments.