Diane:

In answer to your question and based on my experience doing short sales:
1. You do not have to be behind in your payments to negotiate a short sale. You just have to show that making your payments is not a sustainable option.
2. Those who tell you that banks won't speak to you if you are current on your mortgage are buying into an 'old wives tale'. The clerks in the Loss Mitigation department like to tell you that, but the higher ups don't require it, in most cases.
3. More and more, banks want to work with you to keep you from becoming delinquent in you payments during the short sale process. One of my clients got a forebearance from the lender for 2.5 months. The terms were NO payments, NO negative reporting to the credit bureaus, NO late charges, NO default interest charges, NO collection or legal fees, NO foreclosure proceeding.
4. A short sale is all about negotiating. You can't get what you don't ask for. I have been asked, how did we get the forebearance. Answer: ask and negotiate.
5. A short sale is basically an agreement from your lender to take less than what is owed as payment in full for your loan. Therefore, any payments that you make during the short sale process are basically to reduce the negative impact on your credit score and show good faith. (Then again, if you have a forebearance, this is a moot point.)
6. Negotiate, negotiate, negotiate and ask for the moon. Make sure your Realtor knows how to do this, is tenacious and persistent, and knows when to push and when to give the lender time. Then have patience yourself while the process works its way through.

Now that I have answered your question, I am wondering, what has brought you to the conclusion that a short sale is your only option. As a home retention consultant, I work with people to explore ALL their options for saving their home and / or their credit. I would be happy to speak with you directly to explore the options that fit your specific circumstance, no charge, no obligation and also no promises. If you could find another solution, would you take it? Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty

Diane if you are going to do a short pay and you keep making payments, you are throwing your money away. If you do a short pay your credit is going to take a huge hit, even if you keep making payments. My question to you is, What benefits do you get by making your payments? If your credit is going to be damaged, let it be damaged and save your money. The reason a bank would allow for a short pay, is if you can not afford to make the payments, there has to be a hardship. If you have a second mortgage they will call you to ask you for money, but again you are doing a short pay so why would you pay them? Make sure you have all of your questions answered and your facts in order before you decide to go ahead with this choice.

Dyanna

Hello Diane,

I think it's great that you want to continue your payments during the short sale process, however, I don't think that bank will speak to you about doing a short sale unless you are behind in your payments.

Best,

Monique Carrabba
The Reavis Group
mcarrabba@kw.com