Should You Make Your House Payments or Not In a Short Sale?

22 Jun 2010 · Kurt

Should you make your house payments or not in a short sale? I get this question asked to me all the time from homeowners who might be able to scrape by and continue making them, but also have decided to pursue a short sale. Well the first thing I have to say is this. I CANNOT nor WILL NOT instruct you one way or the other or offer any advice as to whether you should continue making payments if you can afford them. What I can do is offer you information in regards to the pro’s and con’s of making your payments in a short sale or not. Everybody has different situations when it comes to selling a home in a short sale, and everyone has different goals and objectives. The other thing to understand is that short sales are designed for people who have a legitimate hardship or a proven impending hardship. I have done a tremendous amount of short sales where the borrower has never missed a home payment, yet were still able to complete a short sale. I have done this with almost every major lender out there multiple times, but the borrower must have a hardship or impending hardship and we have to be able to prove this and it is always a case by case basis.


So with that being said here are the Pro’s and Con’s to making payments and NOT making payments in a short sale:


Pro’s to MAKING your payments during a short sale:

–          The foreclosure clock does NOT start so you have plenty of time to get the transaction done.

–          You will NOT receive any 30, 60, 90, etc late payments reported on your credit.

–          Might be easier to find a place to rent when you move.


Con’s to MAKING your Payments during a short sale :

–          You will NOT get any of this money back.

–          You may be denied as a candidate for a short sale until you go late. (This is a requirement of FHA and the new HAFA program, as well as some other lenders)

–          The process may take longer to complete, the banks have NO sense of urgency.


Pro’s to NOT Making Your Payments during a short sale :

–          You will qualify much easier for a short sale

–          You can still live in your home, and save the monthly mortgage payments for other expenditures.


Con’s To NOT Making Your Payments during a short sale:

–          The Foreclosure Timeline Starts

–          Late Payments reported on your credit history

–          Might be more difficult to find a place to rent and live

Kurt Wannebo
San Diego Real Estate and Investments

Kurt Wannebo

California / San Diego Real Estate & Investments / Broker Kurt · 3636 Nobel Drive · Suite 170 · San Diego, CA 92122

Phone: 1.888.473.7324 · 858-412-5541 · Email: info@sdreai.com

CalBRE#: 01468255

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