Q: Although I have a financial hardship, my lender recently turned down my short sale request because I was not 45 days late on the payment. I am out of money and willing to leave the property but don’t want to go through the trouble of a foreclosure. I want to do the right thing, but I don’t know what that is.
A: I have often said that it is worth trying a short sale while you are still making payments. If the short sale is approved, it’s easier on you, your neighbors and the bank. Although some lenders are willing to work with you while you’re still current, others require the loan to be delinquent. I have been told they do this to scare away “strategic” short sellers, but this does more harm than good to all involved, in my opinion.
My advice: Try again. I have helped many clients get approvals from the same lender shortly after a denial by simply resubmitting the application.
In August, the government announced that it’s giving banks “more clear and consistent guidelines making it easier to process and execute short sales.”