Foreclosure in 20744>Question Details

Jmorrow, Home Seller in 20744

Can I short sale if I have never missed a payment?

Asked by Jmorrow, 20744 Mon Mar 8, 2010

I am in good standing on both my mortgages, I have never missed a payment. I am 100K upside down at least in my home currently, and Chase has sent me a letter notifying me that my payment will adjust without cap to the dollar amout or the interest rate in Feb. While I can pay my mortgage now, any increase will cause me to default. Both mortgages are held by I have any options? I do not qualify for any government programs to modify my loan, I have checked more than once with more than one person - employed by Chase and not.

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If you want to stay in your house and lower your payments by half, you may want to consider a house lease back.
0 votes Thank Flag Link Sat Oct 22, 2011
Yes you can short sale a property without being behind on the payments as long as you can prove hardship, but do not think hardship is just the fact the market went south and now you owe more than the value of the home that is called misfortune. In fact short sale with no late payments is the only form of foreclosure that allows you to reenter the mortgage market without the penalty of the "Waiting Period" (see attached).
Have you tried a modification? You look like you would be a perfect candidate for one, call your bank and start the process before your mortgage resets being proactive is key. WARNING do not get involved with some two-pit modification shark you can deal with the bank directly (it will not be easy).

Waiting Periods to Buy After Foreclosure
* Buying After a Foreclosure
The waiting period is 5 years up to 7 years.
* Buying After a Foreclosure with Extenuating Circumstances
The waiting period is 3 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure
The waiting period is 4 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure with Extenuating Circumstances
The waiting period is 2 years up to 7 years.
* Buying After a Short Sale
The waiting period was just upped from 2 to 3 years. However, if a seller does not have a 60-day late pay, that seller may immediately buy another home. It's a reason to stay current on your payments while the home is on the market as a short sale.
0 votes Thank Flag Link Wed Mar 10, 2010
I have done modifications for Chase, and just recently Chase has been offering to let the homeowner stay in the home and rent it from Chase - this is a brand new progarm, and I am not sure what states they are rolling it out in - but it makes sense to keep the original owner in the property if there is any way tney can - but if you have an adjustable that is going to go out of sight, you might want to contact them and do a deed in leiu and ask for the rental program - good luck!
Web Reference:
0 votes Thank Flag Link Tue Mar 9, 2010
Please consult with someone who really knows what they are doing and isn't just talking into the internet, as most real estate agents have no clue what they're doing. The answer to your question: yes, anyone can get a SS through w/o being in default; you just have to show hardship, including imminent risk of default. ARMs are per se hardships, as are other things, so you should be fine.

We've completed over 450 short sales over the past few years. Feel free to give me a call directly for a free consultation, even if you just have questions and no real intention of moving forward with the short sale. As an attorney, I can usually field most questions homeowners have.

Brian Gormley
Broker, Attorney
0 votes Thank Flag Link Mon Mar 8, 2010
I have several clients in this situation and the main goal is to outline your hardship and see if your lenders are proactive enough to discuss your situation before you get behind. Every situation is different so there is no one answer to fit all. Bottom line is that your lenders control the process and outcome.

Charles Lancaster
Exit Right Realty
240 554-4093
0 votes Thank Flag Link Mon Mar 8, 2010
Unfortunately, thats the catch-22 of this situation. No doubt, you don't want to mess up your credit by missing a payment, but many banks won't talk with you about a short sale until you prove that hardship. Another alternative might be to have your property reaccessed.. Many of my former clients who have found themselves underwater due to house values declining have taken this route with success. Saving themselves a few hundred dollars a month -- those dollars can sometimes mean the difference between foreclosure and keeping your home..

I'm sure this is a precarious situation for you. All the very best,

0 votes Thank Flag Link Mon Mar 8, 2010

Don't give up. Talking with lenders can become a major hassle. Have you spoken to a Maryland Hope counselor. Check out the website Also ask to speak with supervisors or Managers at Chase. Everyone is just overwhelmed right now.

Good Luck
0 votes Thank Flag Link Mon Mar 8, 2010

If you have exhausted all other avenues as you touched on with the loan modification, then my suggestion would be to get that home on the market and find an agent who either has had alot of experience in short sales or go to the CDPE website to search for one.

That said, I would have many questions before proceeding. The first might be obvious, but I do not like to assume anything. You said you are 100k upside down. Is that due to home equity loans or have you had a market analysis done or both?

When you apply for a short sale, Chase will want to know every aspect of your financial situation. You will be required to fill out a financial statement, among other things, to prove that you cannot continue to make payments on this home. This will require proof of a "hardship" among other things.

The sooner you get going, the better.
0 votes Thank Flag Link Mon Mar 8, 2010
Without knowing any of your financials/assets--Have you tried contacting the lender for a loan modification--if you do end up considering a short sale, protect yourself and consult with an attorney who specializes in real estate, especially if other assets are involved--the lender may decide to issue a difiency judgement for the difference in money owed.
0 votes Thank Flag Link Mon Mar 8, 2010
The short answer is yes you can do a short sale without having missed a payment.
0 votes Thank Flag Link Mon Mar 8, 2010

It's more difficult but it can happen.

More importantly, if you find a way to get the bank to accept the short sale without missing a payment, you can qualify to purchase right away under FHA guidelines…

If you miss any payments, there will be a 3-4 year waiting period before you can qualify for financing depending on the type of loan you're applying for.
0 votes Thank Flag Link Mon Mar 8, 2010
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