My home is in the short sale process. I'm running out of money and have to decide what is more important or less important to pay (homeowners and

Asked by Samantha, 33904 Wed Sep 30, 2009

flood insurance, property taxes, or my mortgage payments). Which one will hurt me the least if I don't pay? (I'm not sure if it will affect my credit if I don't pay my insurance, but I think it will if I don't pay my mortgage or taxes.)

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4
Keith Manson-…, , Milwaukee, WI
Thu Oct 1, 2009
You have lots of decisions you need to make. Alot of it determined if these expenses are paid through your escrow of not. If these expenses are escrowed than by stopping payments you are stopping every thing!

If you can separate the items are only worried by credit reporting then the priority of your expenses would be mortgage payment. If you complete a short sale and have a current loan it may not effect your credit.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf

If you do not pay the insurance the mortgage company would most likely force place the insurance to insured they are covered but it will not be the best coverage for you and will be 3 times as expensive.

Taxes take a longer time to hit your credit. However, you have to look at your state statuates to best understand how this is handled. Usually after 1-3 years deliquent the banks will pay to protect the asset. The issue is that taxes is the primary lien.


Hope this helps

Keith Manson
First Weber Group
Certified Distressed Property Expert
Greenfield, Wisconsin 53228
0 votes
Jenny A. Le, , California
Wed Sep 30, 2009
The following is listed in the order of highest to lowest priority:

1. Property tax - in most states, property tax is paramount to all other debts, including bank debts. The city/county/state can foreclose a property to collect all back taxes.
2. Mortgage payments - shortsale (3-5 yrs), foreclosure (7 yrs), and bankruptcy (10 yrs) are all negative marks on a credit report (yrs negative mark stays on credit report.)
3. Flood insurance - isn't Florida is in the middle of the hurricane season?

However, all debt obligations are equally important.

You should request the bank to provide temporary debt relief (defer or reduce payment obligations until the shortsale process is completed.) Partial or adjusted payments is a much better alternative to non-payments.
0 votes
Samantha, Home Seller, 33904
Wed Sep 30, 2009
UPDATE TO MY QUESTION ABOVE:
My insurance and property taxes are not escrowed. I pay them myself.
0 votes
Kevin Clouti…, Agent, Cape Coral, FL
Wed Sep 30, 2009
Dear Samantha,

This question needs to be addressed privately, not in a public forum. This is confidential and private for you. You can call me on my cell 239-246-6639 or e-mail me Kevin@kevincloutier.com and I will be happy to consult with you and then you can make in informed decision.

I have listed and sold many short sales in Florida and Maine and worked with many different banks in the process.

If your home is already listed with an agent, they should have had that discuss with you. If you are not listed yet, I can help you.

Kevin Cloutier, REALTOR
Keler Williams World Class Realty
13121 University Dr
Fort Myers, FL 33907
239-246-6639
Web Reference:  http://www.kevincloutier.com
0 votes
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