when is too late to do a short sale? We did not get our loan mod. approved

Asked by Yvon, San Diego, CA Tue Aug 11, 2009

and now the mortgage co. isdemanding that we pay $xxx or else they are going to foreclose. What should we do? We can not afford the amount that they are demanding and we do not want to foreclose because we do not want to damage our credit score.

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Hannah Fliegel’s answer
Hannah Flieg…, Agent, Larkspur, CA
Sun Sep 13, 2009
Hi Yvon,

If you are already late on your mortgage payments then the damage has been done to your credit rating. Typically other credit, such as credit card limits were reduced or closed entirely on you by now.

There is only one way to protect a credit rating prior to defaulting on a mortgage. Before you defaulted you would need to send the lender a "qualified written request" and then if you default in order to execute a short sale and the lender does report 'late payments' on your credit reports, this becomes illegal for the lender and they actually owe you money! Furthermore, the lender must remove those late payments. Understand that in the end the 'short sale' will remain on your credit reports however all the 'late payments' will have to be removed by the lender.

For the future, your credit rating will be much more favorable if you have a short sale that does not include late payments, vs. a short sale that does have late payments. This strategy works well for Foreclosures, Deed in Lieu and Loan Modifications as well. Good luck!
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Melissa Zava…, Agent, Escondido, CA
Wed Aug 12, 2009
With most lending institutions, you can begin the short sale process as late as a week or two before the scheduled foreclosure date. Some banks, however, do not like to postpone those trustee's sales at the eleventh hour.

You've received some great advice from the other agents who have already responded. If you need help with short sale negotiations, feel free to contact me.
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Listing Book…, , San Diego, CA
Wed Aug 12, 2009
Yvon, When you purchased your home and got a loan you had a signed agreement with the lender to pay off the note or they will take the home back. It's unfortunate that many are in the position of being upside down on their home and having difficulties making payments. I completely understand. The bank also is in a sticky situation. They need to make sure they get what they need via the agreement to lend you money to buy a home. I would say you should be speaking with an attorney to go over the ramifications of a short sale or foreclosure. The decision to pay the bank the $$$ is clear to me, you said you don't have the money so you can't. You might want to look to borrow it from family or friends. A short sale might be a good option if the bank allows it to go through. I wish you all the best and short sale or foreclosure your credit will be effected.

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Patti Adams, Agent, San Diego, CA
Tue Aug 11, 2009
I am a local Realtor with expertise in Mission Valley West and short sales. Would be happy to talk to you about your specific situation. There is actually quite a bit of demand for West Mission Valley Condo's right now. I am looking for a 2 bdrm 2 bath for a client in the low 300's and there is very little to choose from.

give me a call if you want to chat. 619-887-9313

Patti Adams, Windermere Pacific Coast Properties, DRE # 01229068
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Andre Mettler, , Daly City, CA
Tue Aug 11, 2009
Almost never too late for a short sale! LENDERS DO NOT WANT YOUR HOUSE, THEY WANT YOUR MONEY! Please understand the basic time line of foreclosure in California. Once you stop paying your mortgage the lender has to wait 90 days to file a NOD (Notice of Default) which gets recorded at the county. This starts the foreclosure process. Then the bank has to wait another 90 days at least to sell your property at a trust sale. I have called banks months after the NOD was filed and as little as 10 days before the scheduled sale and negotiated a postponement in order to sell that property short. You need an agent that knows how this works and you do not-never pay anything up front! If the bank makes more money on the bottom line in a short sale than in a foreclosure you can get a deal.
for more... info@amettle.com ...
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Middleton And…, Agent, La Jolla, CA
Tue Aug 11, 2009
A lot goes into the process of a short sale...and is very dependent on your financial situation, and your ability to show a hardship to the bank. It is not an easy process, but with the correct PROFESSIONAL experience it can usually go quite smoothly.

If you would like some more information, and to sit down and go over your options, please feel free to call or email.

Just remember that you have OPTIONS, and that you don't have to feel like you are being pushed around by a bank that views you as a number. We can help.

Justin DeCesare
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Mike Lewis, Agent, San Diego, CA
Tue Aug 11, 2009
Yvon, Call us and lets talk about what your short sale options are. A short phone call will be able to tell me if I can help you. Call Dawn at 619-981-3917. Looking forward to speaking with you.

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