somebody told me if I put my house on short sale, I can stay on my house without paying any mortgage for

Asked by Andrew, oceansdie Sun Apr 13, 2008

How long can I stay on my house with out paying the mortgage if I put my house on a short sale? Since somebody told me if my house is on the short sale, I can live in my house without paying mortage for more than one year. Is this correct?

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16
Cami Pinsak, , Camarillo, CA
Wed Apr 23, 2008
Hi Andrew,
I so hope that it wasn't a fellow realtor that told you that. I just don't feel that it is really ethical to indicate that it is ok to renig on a contract that you signed up for. Having said that, let me step down off my high horse and acknowledge that I don't know your specific situation or circumstances.
The short sale itself, won't allow you to live any longer in your home before it sells at auction. Unless...you did get a viable offer in plenty of time to stop a sale. I highly recommend that you contact your bank and see if you can modify your mortgage to a point that you can continue paying something on your home.
Best of luck to you!
1 vote
Alex Inskeep, , Scottsdale, AZ
Fri Apr 18, 2008
Andrew,

I do short sales all the time now unfortunately and I can tell you it depends on the lender and what state you live in. The first thing I would do is find out the foreclosure laws in your state. I'm assuming California? Do a google search for this. I use http://www.foreclosurelaw.org/ a lot to get info. For California it says 120 days. What that typically means is that you have 120 days before the home is put up for sale after you receive your notice of trustee sale ( or whatever they call it in California). I've seen lenders that send out this notice after 2 payments being past due and others that don't for 6 months or more. My advice is that you shouldn't be taking advice from any realtors or individuals - contact an attorney in your state that HANDLES foreclosures and possibly bankruptcy to get the most accurate answers to all your questions. It's an important event in your life and you should invest in it so you can make the best decision for you.

Best of Luck you'll get through it, everyone does!
1 vote
Chrissym, , Oceanside, CA
Thu Oct 8, 2009
i live in my parents house they tried a short sale, and the same thing the broker told them to stop paying their morgage this was in june 2008, in october 2008, they moved out, but i stayed behind to keep up with the place. here we are now in september 2009 and my parents just received their notice of defaut. that's 15 months with not paying any morgage. i believe in 90 days the house will go up for auction and then we will have 30 days, so roughly i'm thinking jan.15th. my question though is what happens if no one buys it at the auction?
0 votes
Joan Wilson, Agent, San Diego, CA
Wed Jun 24, 2009
In todays market, I doubt that you would get a year. It is more likely about 6 months. It could be as little as 3.

And you have tons of people coming through your home.

Best of luck and let me know if I can help,
Joan Wilson –Realtor, Ecobroker, SRES, Reo & Short Sale Specialist
Prudential
760-757-3468
0 votes
Don Tepper, Agent, Burke, VA
Wed Apr 30, 2008
Look: You had an agreement with your lender. You pay a mortgage, and you get to live in the house. You've got a contractual obligation. You've also got a moral obligation. Now, if you truly are unable to pay, then, OK, you can't pay. And, as the answers below note, that situation can continue until either the house sells and the sale is approved by the lender, or until the lender forecloses. But if you're able to pay, do so. Short sales are not a mechanism to live rent-free in a property.
0 votes
Charlsie Hum…, Agent, Sapulpa, OK
Wed Apr 30, 2008
Andrew, a short sale is only one step away from a forclosure.
Hope you the best. Have a great day and God bless
Charlsie Hummel
0 votes
Will Robles, Both Buyer And Seller, 76248
Wed Apr 30, 2008
It depends on how long the mortgage company stops the foreclosure process for. You basically have until someone either buys the property from the bank or it goes to auction. The clock is ticking though. If you're going to do a short sale I buy those types of houses. Call me and we can talk.

Regards,
Will Robles

888.605.9190 ext. 1
will@firstcasasolutions.com
0 votes
A, , San Diego County, CA
Fri Apr 18, 2008
I agree with many who said take a look and eval you situation. My suggestion is look at all options. If you are having trouble making your payments, but you are working...don't give up! Call your bank , ask to speak with someone in the retention department. They will send you a few documents to fill out and ask for some financial statements. As well they will ask you to write a letter explaining what the deal is. In addition to explaining your situation it will be refreshing to them if you Include facts..and draw out for them what the houses in your neighborhood are going for and show them that it is more beneficial for them financially to work with your than to foreclose. Ask for a principal and or interest rate reduction. Call the the retention department every week. Write down who you talk to, each time ask for so and so's supervisor until you get to the right person. If it seems that there is no way the bank wants to work with you then speak with your tax guy about the ramifications of a short sale and or foreclosure.
0 votes
Sandra Zambi…, Agent, San Diego, CA
Tue Apr 15, 2008
Andrew
This depends on your bank, most banks are buried in REO's and NOD's, I would contact your bank and discuss your financial situation and see if you qualify for a Loan Modification or possible Deed in Lieu of Foreclosure or Short Sale. The length of time that you can continue to reside in the residence will depend on the banks backlog, it could be anywhere from 3 months to one year. I work here in North San Diego County, if would like me to consult with you and your bank give me a call. I currently have REO's, NOD's and Short Sale transactions and I will be happy to guide you. Sandra Zambito, Realty Executives 760-751-8528 cell 297-0826
0 votes
Len McGuirk, , Las Vegas, NV
Tue Apr 15, 2008
Jason,

My mistake. I should have read your comment more carefully. I apologize. I thought you meant the short sale process takes 6 months. I am seeing the short sales on average take about 3-4 months to complete in my area. Las Vegas is rated #1 in foreclosures. Our market is flooded with REO and short sales, so it is taking longer from the banks to respond.
0 votes
Jason Lopez, Agent, San Diego, CA
Tue Apr 15, 2008
Len,

Thank you for your response, however I did not say short sales take 6 months. I said the foreclosure process takes 6 months. I also said each bank has it's own policy on how to process short sales, and that I had personally had 2 short sales take four months to process. In the areas my company works, S. California, we have an over-abundance of short sales and the banks are way understaffed. It is rare that a short sale gets done in less than 2-3 months....most of that tme is spent waiting for the banks (typically there is a 2nd lein holder that needs to sign off) to make a decision.
Web Reference:  http://www.realestate.com
0 votes
Len McGuirk, , Las Vegas, NV
Mon Apr 14, 2008
Jason,

Short sales do not necessarily take 6 months. I have done them faster than that. Most of the time people don't have 6 months to short sale their home considering that most of them are already in default.
0 votes
Jason Lopez, Agent, San Diego, CA
Mon Apr 14, 2008
Each lender has it's own policies on this. Know that it could take months to get the bank to approve the short sale. The banks are backed up and not doing a very good job of communicating. I had two short sales finally get approval in March that were originally written up in November. Of course the buyers wanted an even lower price because the market has come down more in that time period. List it with a professional that knows how to get things done and is experienced in short sales. 80% of our business is coming from short sales and I have several agents in your area that can help. You also need to list it VERY competitvely as most of the other homes you will be competing with are short sales. But to answer your questio directly, if you can afford to continue making payments, you should. The forsclosure process will take 6 months.
0 votes
Len McGuirk, , Las Vegas, NV
Mon Apr 14, 2008
Andrew,

If you want to sell your home through a short sale, then that might be a good option for you as opposed to getting foreclosed on. A short sale will not affect your credit as much as a foreclosure will. If you are seriously interested in selling the home for less than what you owe on your mortgage, then you can give it a try by hiring a Realtor to list the property. It is not guaranteed that the bank will accept a short sale, but if they do, you can avoid foreclosure. In the meantime, you can stay in your home for a bit until it either sells or you get foreclosed.

If you would like me to refer you to a great Realtor in Oceanside to list your home, let me know. I have some excellent Realtors all over that I refer my clients to. Unfortunately, I would help you but I am located in Las Vegas. All of my current listings are short sales. Our market is flooded with them.

You can contact me at (702) 203-6688 or email me at RealtorLen@cox.net. I would be happy to get you connected with someone right away.

Len McGuirk
Prudential Real Estate ~ Las Vegas
(702) 203-6688
RealtorLen@cox.net
0 votes
Pacita Dimac…, Agent, Oakland, CA
Mon Apr 14, 2008
Gosh, Andrew...

You seem to be getting bad advice. Before you do anything, analyze what your situation is. Hopefully you've researched the implications of a short sale.

The timelines may be different, but this is generally how it works.

If you've missed 2-3 mortgage payments, the lender will file a Notice of Default. During this time, you may be able to still stop the foreclosure proceedings --- by paying what you owe, negotiating a modified loan, or selling before they foreclose.

A short sale is when a property is sold at less than what the homeowner owes the bank. The bank, with prior approval, may forgive the difference. It used to be that you can be taxed on that difference which the IRS considered income. But this changed with the Mortgage Debt Forgiveness Act of 2007.

In another 3 months or so, if you have not satisfied the lender's requirements, they will go ahead and institute foreclosure. And the lender can also begin the process to evict you.

A foreclosure has the same drastically negative effect as a bankruptcy. Your credit score will take a hit 200-300 points. With a bad credit score, you will have difficulty getting loans, not just for a house, but for other major ticket items like a car. Is this something you are mentally and emotionally prepared to do?
0 votes
Dot Chance, Agent, Burbank, CA
Sun Apr 13, 2008
Andrew, you will totally ruin your credit by doing this. So you really need to think long and hard before making that decision. I don't believe it would take a year before they foreclosed the property. Possibly 6 months...but you need to investigate that.
Web Reference:  http://www.DotChance.com
0 votes
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