Q. Do I need to miss A mortgage payment for a short sale?
A. Absolutely Not! If you have a documented hardship and are in imminent danger of default, there is no need to intentionally miss mortgage payments. Be wary of anyone who recommends that you miss mortgage payments.
Q. If I miss a mortgage payment, can I make payments up later?
A. You can but it gets very difficult. Your mortgage has an acceleration clause built in that requires all of the back payments to be paid in order to make your mortgage current. Therefore, if you miss 2 payments and you have the current payment due, you will need to pay 3 mortgage payments to return your account in good standing.
Q. I want to keep my house but have fallen behind on my mortgage payment. Who can help me?
A. In North Carolina, it is illegal to charge for mortgage modification services. Therefore, the best place to turn for help is a HUD Housing Counseling Agency. Their help is free.
Q. How long does a short sale take?
A. It depends on a number of factors: 1. the number of liens / mortgages, 2. the servicer(s) workload, 3. if there is mortgage insurance on the file, 4. the investors on the file. Typically, it takes 45 days for a lienholder to issue an approval however some programs allow approvals in less than 10 days.
Q. I don’t want to do a short sale or mortgage modification? What happens if I walk away from my house?
A. Talk to an attorney before you do anything. Depending on the type of mortgage that you have, you may open yourself up to a judgment from your lienholder. This is very common with homeowners with HELOC’s (Home Equity Line of Credit).
Q. I have a FHA loan? Can I get a short sale?
A. Absolutely! The FHA Pre-Foreclosure Sale is one of the best short sale programs in existence. Check out our guide on the FHA PFS program.
Q. I have a VA loan? Can I get a short sale?
A. No. Veteran Administration loans are only eligible for Compromise Sales. They require that you pay the balance of what was owed back in full before your VA eligibility benefits are restored.
Q. I’ve heard of people receiving money for completing a short sale? Is that true?
A. Absolutely! Completing the HAFA program will pay homeowners $3,000 for completing a short sale. FHA will pay up to $1,000. Some portfolio programs pay as much as $12,000. However, the majority of homeowners receive no compensation for completing a short sale.
Q. What types of hardships are eligible for a short sale?
A. Death of a spouse or loved-one (doesn’t have to be an income earner), divorce, medical hardship (debt or disease), unemployment, extreme debt due to reduction in pay, relocation for work.
Q. Will a short sale hurt my credit?
A. While I have negotiated a short sale for a client that suffered no credit impact, that outcome is not typical. All the research on the subject seems to suggest the impact depends on the number of late payments and the condition of your credit prior to missing payments. Here’s an article from MyFico.com on the topic.
Q. How are you paid for a short sale?
A. As a licensed real estate agent, I am paid by the mortgage company. I do not charge upfront or at closing to you personally for any of our services. We request that the homeowner purchase a title search in order to uncover any additional liens on the property.
Q. Can I get a short sale if I have 2 mortgages?
A. Yes. The first mortgage will allow the second mortgage to receive a portion of their unpaid balance.
Q. Can I get a loan modification and a short sale at the same time?
A. No. Your lienholder will require you to opt-out of the mortgage modification process in order to proceed with a short sale.
Q. I missed a mortgage payment. Should I move out to avoid foreclosure?
A. Absolutely NOT! The worst thing you could ever do is to leave the home that you have a mortgage on to take rent somewhere else. It can compromise your ability to get help and your lienholder can change the locks on your house before the home is foreclosed on, denying you access. Stay in your home, maintain it the best you are able and reach out for help. If your home goes to foreclosure, move at that time.