A Short Sale by definition is when the lender or the bank agrees to accept less for the property than is actually owed on the mortgage.

If a loan modification doesn’t work out or if you don’t qualify, consider doing a Short Sale before you lose your home to foreclosure.  There is no cost to you because the bank pays the commission, and this will help you to minimize the damage to your credit score and help you to recover financially much easier.

Here are a few common questions:

Q. How many months do I have to be late on my mortgage to qualify for a short sale?

A.  You don’t have to be late, however, you must show a financial concern such as your Adjustable Rate Mortgage is increasing, you’ve lost your job, you have a health or medical issue, or that there has been an huge loss in your home’s value.  So, in other words, you can’t be wealthy with several vacation homes but what it does mean is that you must be experiencing a true “financial hardship.” Under these circumstances, the lenders are very willing to work with an experienced short sale agent to negotiate a short sale of the house rather than have it go to foreclosure!

Q.  Can I do a short sale if I have a 2nd mortgage or does this disqualify me?

A.  A Short Sale can still happen but both of the lenders will need to be satisfied in order to complete the Short Sale.  Your 1st lender will most likely be paid off by the sale of the house, so then it is important to negotiate the terms with the 2nd lender.

Usually, the 2nd lien holder is very willing to settle, however, others are very demanding.  Please keep in mind that it is always in the best interests of both lenders, and particularly the 2nd, to negotiate a fair settlement otherwise if the property moves into foreclosure, they will receive nothing.